Southern Steel Terminates RM427Mil Contract
12 July 2016
Southern Steel Bhd has terminated a contract worth RM427mil with Danieli & C Officine Meccaniche SpA.
In a filing with Bursa Malaysia yesterday, Southern Steel (pic) said the contract had been signed with Danieli on June 16, 2011 for the design, manufacture and supply of a casting unit that would feed directly into a Steckel mill to produce hot rolled coils.
“Danieli has failed to remedy and resolve the issues set out in the notice of termination which constitute a major default and failure by Danieli to fulfil its fundamental obligations under the contract,” it said.
“This termination requires an assessment of the carrying value of the project. Pending the assessment, the company is unable to determine the extent of the financial impact, if any, on Southern Steel group at this juncture,” it noted.
The company said that the termination did not affect its core businesses on the back of better selling prices in the fourth quarter of the financial year ended June 30, 2016.
“Going forward, the industry shall remain challenging and the management will continue to adopt measures to improve cost and productivity,” it said.
Source : thestar.com.my