The Saudi Arabian Amiantit Company (“SAAC”) announces that one of its subsidiaries in Germany, PWT Wasser-und Abwassertechnik GmbH (PWT), owned 80% by SAAC and engaged in EPC contracts for water and sewage treatment plants, is facing certain legal actions with one of its projects i.e. Al Samawa (south of Iraq) Unified Water Treatment Plant (the “Project”).
SAAC Management just learned that in June 2014, The Owner ( Ministry of Municipalities and Works) terminated the Project as it fell under an injunction preventing it to continue the payments due to PWT, and related to claims initiated by a sub-contractor (the “sub-contractor”). PWT's Management strongly believes that the claims filed by the sub-contractor are baseless and will be dismissed by the Iraqi court while the Project will resume in the coming weeks. Therefore, PWT is confident that no impairment loss against its total investment (receivables and work-in-process) in the Project (approximately Saudi Riyals 79.5 million) will be incurred. However, in order to be conservative, Management decided to reverse the accumulated profit booked to-date on the Project and amounting to Saudi Riyals 7.5 million (Amiantit share being Saudi Riyals 6 million), in the second quarter 2014.