TEE International hit with $10.7m loss in FY14 due to cost overrun

Its profit position has been reversed.

Mainboard-listed integrated engineering, real estate and infrastructure group TEE International revealed that it swung to a loss $10.69m due to a one-off project cost overrun amounting to $18,95m.

This reverses the company’s profit position, which it initially reported earlier in July.

“Based on the information available to-date, current developments and discussions with various professionals, management has decided, in the interest of prudence, to recognise the cost overrun in full. The Company is taking all necessary and appropriate actions to recover the cost overrun from the sub-contractors. In one of the Company’s claim against its sub-contractors, the arbitrator has ruled in favour of the Company with only the quantum of the claim to be determined. As a result of the above, the Group and Company was technically in breach of its interest cover ratio covenant with certain banks as at 31 May 2014. The Company is in the process of seeking a waiver of the covenant from the relevant banks,” stated TEE International.