In an effort to reduce debt and spark profits TH HEAVY Engineering Bhd (THHE) plans to shift its business from the fabrication of offshore oil and gas to shipbuilding and ship repair. The offshore engineering services company aims to grow the shipbuilding and ship repair segment to more than 50% starting in 2019, after its regularization scheme is fully implemented.

“Fabrication business in the oil and gas industry is very competitive and already reached overcapacity. We would like to move away from it in the local market while growing shipbuilding and ship repair,” CEO Suhaimi Badrul Jamil said at the company’s EGM in Kuala Lumpur.”

During the EGM, THHE shareholders approved the novation agreement proposal with Yinson Holdings Bhd for the floating, production, storage, offloading facility (FPSO) job awarded by JX Nippon Oil and Gas Exploration (M) Ltd.

“Upon completion of our (regularization) scheme, we hope to pare down our borrowings to RM60 million,” Suhaimi said.

The next phase of the company’s scheme includes issuance of new shares, subject to Bursa Malaysia Bhd’s approval.

“Shipbuilding and ship repair will be our main business starting next year,” Suhaimi added.

The shipbuilding and ship repair segment will focus on the local market first, while works to transform its fabrication yard in Pulau Indah, Selangor, to become a full-service shipyard is underway.