KUALA LUMPUR: SIME DARBY BHD []'s unit Sime Darby Engineering Sdn Bhd (SDE) has reached a settlement with Maersk Oil Qatar A/S (MOQ) that will result in a positive profit and loss impact and write back to the group of approximately RM100 million.
Sime Darby said on Wednesday, March 23 that pursuant to a Close Out Agreement (COA), SDE and MOQ reached an amicable settlement on completion of outstanding works and closed out on claims and payment issues arising from a contract from 2007.
SDE had entered into a contract in February 2007 with MOQ to design, engineer, procure, fabricate, commission, load out, sea fasten, transport to MOQ's designated off-shore location, install, hook-up, tie-in and finally commission and deliver the facilities and components forming part of MOQ's Block 5 Development Plan 2005 for US$632 million.
Sime Darby said the COA stipulation included a payment of US$41.9 million by SDE to MOQ as full and final settlement of all claims, including backcharges and other claims.
It said SDE would also be relieved of all remaining works under the contract save for providing to MOQ outstanding final documentation and warranty obligations.
'The warranty obligations are with respect to agreed components of the work while the warranty period has been reduced from 24 months to 18 months from the date of the COA,' it said.
Sime Darby said the performance bond amount provided by SDE would be reduced to US$16 million, secured by way of a retention bond during the warranty period.
Sime Darby said on Wednesday, March 23 that pursuant to a Close Out Agreement (COA), SDE and MOQ reached an amicable settlement on completion of outstanding works and closed out on claims and payment issues arising from a contract from 2007.
SDE had entered into a contract in February 2007 with MOQ to design, engineer, procure, fabricate, commission, load out, sea fasten, transport to MOQ's designated off-shore location, install, hook-up, tie-in and finally commission and deliver the facilities and components forming part of MOQ's Block 5 Development Plan 2005 for US$632 million.
Sime Darby said the COA stipulation included a payment of US$41.9 million by SDE to MOQ as full and final settlement of all claims, including backcharges and other claims.
It said SDE would also be relieved of all remaining works under the contract save for providing to MOQ outstanding final documentation and warranty obligations.
'The warranty obligations are with respect to agreed components of the work while the warranty period has been reduced from 24 months to 18 months from the date of the COA,' it said.
Sime Darby said the performance bond amount provided by SDE would be reduced to US$16 million, secured by way of a retention bond during the warranty period.
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