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TAS Offshore sees third offshore vessel contract axed

TAS Offshore sees third offshore vessel contract axed
Malaysia’s TAS Offshore has received a third notice of termination from QMS1 Offshore Services over the construction of an offshore vessel, following last month’s cancellations made to two more vessels.

TAS Offshore’s subsidiary TA Ventures had a deal to build one offshore construction vessel at a price of $11.7m for QMS1, and delivery was planned on 11 December 2015. The newbuilding was built by China contract builder.

TA Ventures, however, received the notice of termination on 5 April from QMS1 purporting to cancel the shipbuilding contract.

“TAS’s position is that the purported notice of termination is not valid and the company intends to proceed with legal proceedings,” TAS Offshore announced to the Malaysian stock exchange.

“The vessel was ready for delivery within the agreed time frame but the buyer failed to provide relevant documents and certificates for further process, citing technical and quality issues which we strongly disagree,” the company said.

It added that this incident is expected to have an impact on the company’s results for 2016 financial year, but the extent of the impact will depend on the outcome of the legal proceedings against QMS1.

Last month, QMS1 also aborted shipbuilding contracts at TAS Offshore for two anchor handling tug oil recovery supply vessels.