Defence Ministry seeks legal damages for Scorpene submarine maintenance

KUALA LUMPUR, 12 July 2017:

Boustead Heavy Industries Corp Bhd’s (BHIC) indirect unit, Boustead DCNS Naval Corp Sdn Bhd (BDNC), has received a letter from the Ministry of Defence claiming against BDNC a liquidated damages amounting to RM53.2 million and €19.3 million.

The claim was for the breach of obligations under the in-service support for the Royal Malaysian Navy Scorpene Submarines Contract (ISS contract), it said in a filing to Bursa Malaysia yesterday.

“BDNC is currently responding to the letter of claim. The board of BHIC is of the opinion that BDNC has adequate basis to defend and to appeal against the claim.”

BDNC is a joint-venture company between BHIC’s subsidiary, BHIC Defence Technologies Sdn Bhd (60%) and DCNS SA (40%).

BHIC said the ISS contract was awarded to BDNC by the government, represented by the Defence Ministry, through a letter of award dated 12 Aug 2010.

“The claim is expected to have a material financial and operational impact on the BHIC Group for the financial year ending 31 Dec 2017.”

– Bernama

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