Reference is made to the Malaysia Marine and Heavy Engineering Holdings Berhad’s (“MHB” or “the Company”) announcement made on 3 July 2023 pertaining to the MOU between Malaysia Marine and Heavy Engineering Sdn Bhd (“MMHE”) and Uzma Engineering Sdn Bhd (“UESB”).

1. Introduction

The Board of Directors of MHB wishes to announce that MMHE, its wholly owned and major subsidiary of the Company, and UESB, a wholly-owned subsidiary of Uzma Berhad, had on 14 August 2024 entered into a Sub-Contract Agreement (“the Contract”) for the provision of Refurbishment, Life Extension and Conversion of a Mobile Offshore Drilling Unit (MODU), into a Mobile Water Injection Facility (WIF).

(MMHE and UESB are collectively referred to as “Parties” and individually referred to as “Party”).

The consent from UESB for MHB to release the information on the Contract to Bursa Malaysia Securities Berhad was obtained on 1 October 2024.

2. Salient Terms of the Contract

The salient terms of the Contract are as follows: -

(a) MMHE shall perform the work including all deliverables related to fabrication engineering, demolition, repair life extension and conversion of the MODU including all related general services (“Work”);

(b) The estimated Contract price is approximately Ringgit Malaysia Forty-Three Million Only (RM43 million);

(c) The Work shall be completed following the schedule that has been agreed between the Parties and upon the issuance of the Statement of Completion by MMHE which will then be followed by a Completion Certificate by UESB; and

(d) The completion of the Work is expected within the first quarter of 2025.

3. Risk Factors

The success of the Contract might be affected by various risk factors including execution risks, weather conditions, any operational and commercial impacts that may result from political and economic uncertainties at both local and global levels, as well as the impact of pandemics or other endemic diseases. MMHE has considered the risks and developed mitigation plans to ensure the successful execution of the Contract. 

4. Financial Effects

Barring any unforeseen circumstances, the Contract is not expected to have any material effect on the earnings per share, net assets per share, gearing, share capital and shareholding structure of the Company for the financial year ending 31 December 2024.

5. Directors’ and Major Shareholders’ Interests

None of the Directors and/or major shareholders and/or persons connected with the Directors and/or major shareholders of MHB has any direct or indirect interest in the Contract.

6. Directors’ Statement

The Board of Directors, upon considering all the relevant aspects of the Contract, is of the opinion that entering the Contract is in the best interest of the Company.

This announcement is dated 1 October 2024.