25th Feb 2015 08:02
LONDON (Alliance News) - Ultra Electronics Holdings PLC on Wednesday said its Oman Airport IT contract has been formally terminated and it will book a GBP47 million provision in its accounts related to the loss of the deal.
The company said Ithra, its joint venture with the Oman Investment Corp, is working with the Omani Ministry of Transport and Communication and the engineer on the project, Hill International, to effect a formal handover of the contract.
The reasons provided in the notice of termination state Ithra failed to meet contractual milestones. Ultra said Ithra believes the termination of the deal was "unjustified, wrongful and unlawful" and Ultra is holding talks with its legal and claims advisers on the alleged wrongful termination of the contract and on the recovery of Ithra's costs and claims.
As a result of the termination, however, Ultra will make a GBP47 million provision in its accounts for the year to the end of December 2014. The provision covers the write off of contract balances, along with a provision for all known liabilities, the company said.
In addition, Ultra said it would book a further GBP7.4 million non-cash impairment following a review of its activities in the Middle East. The charge related to its Al Shaheen joint venture with Emirates Advanced Instruments in the training sector in the region.
Ultra will post its 2014 results on March 2.
By Sam Unsted; [email protected]; @SamUAtAlliance
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