Malaysian shipyard TH Heavy Engineering (THHE) stands on the brink as it desperately seeks cash to fight off three winding up petitions it received last week.
Three parties have filed claims for a total of RM38m ($9.52m) against the yard leading some analysts to wonder if it can continue to operate as a going concern. The claims are in relation to the supply of equipment and work done for the Layang FPSO project.
“THHE’s current cash flows are unable to service debt. We believe that the company, which suffered a loss of RM33m in the first quarter of financial year 2016 (1QFY16) in addition to losses of RM45m in FY15 and RM76m in FY14, will have difficulty in securing external financing for its working capital and ongoing projects unless it is able to recapitalise its balance sheet via an equity raising exercise,” AmInvestment Bank Research said in a report.
