Hot Stock Muhibbah Engineering down 3.46% following Queensland lawsuit involving subsidiary.

by **Cals** Tue 16 Jun 2015, 20:54

Hot Stock
Muhibbah Engineering down 3.46% following Queensland lawsuit involving subsidiary.

PETALING JAYA (June 16): Muhibbah Engineering (M) Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) shares dipped 8 sen or 3.46% to RM2.23 in the morning session today on the back of news that it is embroiled in a legal tussle in Queensland, Australia, involving its subsidiary’s joint venture (JV) which conducted works at the Wiggins Island Coal Export Terminal at Gladstone.
A total of 349,400 shares were traded in the morning session today.
The stock reached an intra-morning high of RM2.28 and a low of RM2.22.
In a filing with Bursa Malaysia yesterday, Muhibbah Engineering (fundamental: 1.1; valuation: 0.8) announced that the Wiggins Island Coal Export Terminal Pty Ltd (WICET) had filed a claim in the Supreme Court of Queensland against Monadelphous Muhibbah Marine (MMM) JV, of which Muhibbah Engineering (M) Bhd’s wholly-owned subsidiary Muhibbah Construction Pty Ltd holds a 50% interest.
Muhibbah Construction entered the JV with Monadelphous Engineering Pty Ltd for the construction of the approach jetty and ship berth, as well as shiploader associated with the Wiggins Island Coal Export Terminal.
The claim names the MMM JV partners as defendants, as well as the respective parent companies.
Muhibbah Engineering said the claim relates to two MMM contracts and associated costs totalling approximately A$130 million related to the project, a majority of which was paid to MMM under the Building and Construction Industry Payment Act 2004 (Qld) (BCIPA) and variations previously approved by WICET.
Muhibbah Engineering said the claims submitted by WICET were “unwarranted”, saying it would “vigorously” defend the proceedings and will file a counterclaim through the JV in excess of A$200 million.
It also said further claims are being compiled to recover costs associated with changes in scope and nature of the works.
The Sydney Morning Herald had reported in October last year that WICET chief executive Robert Barnes had said several multi-million dollar claims were lodged by MMM under the under the BCIPA, which could delay the completion of the coal terminal that was initially expected to begin exporting coal in November.
The report had also stated that in June last year, the Australian Building & Construction Dispute Resolution Service ruled in a 108-page decision that WICET owed MMM A$65.6 million after a submission of A$107 million in claims.
These reportedly included variations related to wharf plans, lashing of concrete for shipping, marine spotters, rehandling of steelworks and inclement weather.
It was also reported that MMM submitted two subsequent claims totalling about A$150 million.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)