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Nam Cheong books $444m in asset impairments and writedowns

Embattled Nam Cheong has made asset impairments and writedowns of MYR1.88bn ($444m) during the second quarter, sending the OSV builder into a first half loss of MYR2.07bn.

Singapore-listed Nam Cheong said the assets impairment and writedowns included impairment on property, plant and equipment, investment in associate, investment properties, and trade and other receivables, as well as inventories writedown.

The first half loss of MYR2.07bn widened significantly from the deficit of MYR37.45m in the same period of 2016.

Despite registering a huge jump in first half revenue to MYR169.13m from MYR24.32m in the year-ago period due to the sale and delivery of two vessels during the second quarter, it did little to reverse the dire situation for Nam Cheong.

Financially strapped Nam Cheong recently announced it has been hit with a $16.4m writ of summons by creditor AmBank, and a $10.04m claim by Overseas-Chinese Bank of Corporation (OCBC).

The Malaysian firm has entered into talks with its creditors for a restructuring via a scheme of arrangement, and has temporarily ceased repayment on all borrowings as it reviews its options to restructure its businesses, operations and balance sheet.

“The outlook for the offshore and marine sector remains weak and the group anticipates the progress of vessel sales and shipbuilding to remain slow,” Nam Cheong stated.

The shipbuilder has deferred the schedule of deliveries of its vessels currently under construction, both at customers’ requests and also at the group’s initiative.

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