The Board of Directors (“the Board”) of KKB Engineering Berhad (“KKB”) wishes to announce that its subsidiary OceanMight Sdn. Bhd. (“OMSB”) has issued a notice to commence arbitration proceedings (“Arbitration Notice”) against Shapadu Energy Services Sdn. Bhd. (“SHAPADU”).

Vide Letter of Awards dated 23 December 2019 and 14 January 2020, OMSB appointed SHAPADU as its Subcontractor to carry out Hook-Up Commissioning Projects in Sarawak. A dispute has arisen between OMSB and SHAPADU in relation to the projects.

By OMSB’s solicitor’s letter dated 6 April 2023, OMSB refuted SHAPADU’s claims and stated that SHAPADU has fundamentally breached its obligations under the contracts. As a result, OMSB had to take over the subcontract to complete the projects.

Pursuant to the Arbitration Notice, OMSB is claiming costs for the completed projects, loss of profits and all other loss and expenses incurred including incidental costs.

The abovementioned arbitration proceedings commenced by OMSB is not expected to have any material effect on the earnings, net assets and gearing of KKB Group for the financial year ending 31 December 2023. The arbitration proceedings are also not expected to have material operational impact on KKB Group.

To the best of our knowledge, none of the Directors and/or major shareholders and/or person connected with them has any interest, direct or indirect in the abovementioned proceedings.

The Board will make further announcements if there are any material developments on the above matter.

This announcement is dated 15 September 2023.