The Board of Directors of Federal International (2000) Ltd ("the Company") wishes to announce that the joint venture agreement dated 8 December 2003 (JVA) entered into by Tiong Woon Corporation Holdings Ltd, Hiap Seng Engineering Limited, Rotary Engineering Limited and Plant Engineering Construction Pte Ltd and the Company (Joint Venture Partners) has been mutually terminated by the Joint Venture Partners with effect from 20 May 2005 pursuant to a deed of termination dated 20 May 2005 entered into by all Joint Venture Partners (Deed of Termination of the JVA).|
The joint venture company, Singa Consolidated Engineers & Constructors Pte Ltd (SINGA), was incorporated with the objective of providing consortium turnkey services in the oil-rich regions of Sakhalin (Russia) and the Middle East, to the petroleum, petrochemical, specialty chemical, power plant, oil and gas, water treatment and waste treatment industries.
When the JVA was signed, the Joint Venture Partners had intended to collaborate by leveraging on one another's collective and complementary strengths. However, the Joint Venture Partners realise that the chances of securing projects are slim as the potential customers in these region prefer to work with individual service providers, rather than a joint-venture company formed by various services providers. Accordingly, the Joint Venture Partners have therefore decided to terminate the joint venture arrangement and an announcement will be made by the respective Joint Venture Partners.
Pursuant to the Deed of Termination of JVA, the Joint Venture Partners will be taking the necessary and appropriate steps to wind up and liquidate SINGA.
The termination of the JVA is not expected to have a material effect on the financial position of the Federal Group.