22/10/2008 - 15:33

Indonesian trouble for Clough

22/10/2008 - 15:33

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Engineering company Clough Ltd could take a $23 million hit after its Indonesian subsidiary disclosed that it had been forced to suspend work on a coal mine project, which is currently seeking to raise additional capital needed for completion.

Indonesian trouble for Clough

Engineering company Clough Ltd could take a $23 million hit after its Indonesian subsidiary disclosed that it had been forced to suspend work on a coal mine project, which is currently seeking to raise additional capital needed for completion.

Clough's 82 per cent owned subsidiary PT Petrosea, in cooperation with client PT Ilthabi Bara Utama, has suspended work at the mine site and stood down staff pending the outcome of refinance negotiations.

Petrosea has been working for Ilthabi on a series of contracts to develop and operate the Pakar coal mine in East Kalimantan.

Ilthabi advised that additional funds were required to complete the project due to operational reasons and that their investment group led by Merrill Lynch has "suspended further releases of funds to the project until refinancing negotiations are concluded".

Clough said Petrosea is working with Ilthabi and the investor group to facilitate a resolution.

If a resolution is not reached, Clough estimates its maximum exposure to the issue is $23 million.

 

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