1. INTRODUCTION

With reference to the Malaysia Marine and Heavy Engineering Holdings Berhad’s ("MHB" or "Company") announcements dated 29 November 2023 and 4 June 2024 with regard to the Subcontracts to build offshore substations ("OSS") high voltage direct current ("HVDC") platforms under TenneT TSO BV’s ("TenneT") 2GW programme awarded to the Company’s wholly-owned and major subsidiary, Malaysia Marine and Heavy Engineering Sdn Bhd ("MMHE") by Petrofac International ("UAE") LLC ("Petrofac UAE") ("the Subcontracts") with TenneT as the ultimate client and subsequently the announcement dated 14 November 2025 on the Subcontracts, the Board of Directors ("Board") would like to provide the following update.

The consent from parties for MHB to release this announcement to Bursa Malaysia Securities Berhad was obtained on 3 March 2026.

2. BACKGROUND

Petrofac Limited ("Petrofac") had on 23 October 2025 issued an announcement to the London Stock Exchange that it had received notification from TenneT terminating its scope of work on the 2GW programme with immediate effect. This Petrofac announcement did not specifically refer to the Subcontracts between MMHE and Petrofac UAE, a subsidiary of Petrofac.

Pursuant to that announcement, TenneT, as the ultimate client, is undertaking the novation of the Subcontracts to formalise the transfer of contractual obligations to ensure its continuity. During this period, MMHE is continuing to perform its obligations under the Subcontracts.

3. THE UPDATE

On 20 February 2026, MMHE entered into a Deed of Novation ("Novation") with TenneT TSO BV (also signing as the attorney of Petrofac International (UAE) LLC) and Larsen and Toubro Limited ("L&T").

The Novation provides that the Subcontracts are novated to L&T and MMHE shall continue to perform all its duties and obligations under the novated Subcontracts.

Following the Novation, MMHE, L&T and TenneT have completed a joint and comprehensive review of the Subcontracts’ schedule and scope involving the exclusion of the topside of the second OSS (as announced on 4 June 2024) to support enhanced programme certainty, optimised resources and timely delivery of the project. 

4. FINANCIAL AND OPERATIONAL RISKS

The Board is of the view that the novated Subcontracts are expected to continue to contribute positively to the earnings and net assets per share of MHB for the financial year ending 31 December 2026 and beyond up to the completion of the novated Subcontracts. MMHE remains vigilant to protect the financial interest of the MHB Group in the novated Subcontracts. MMHE has considered the risks and plans are in place to ensure the successful execution of the novated Subcontracts.

5. DIRECTOR’S AND MAJOR SHAREHOLDERS’ INTEREST

None of the directors or major shareholders of MHB or people connected to them has any interest, direct or indirect, in the Subcontracts. 

6. DIRECTORS' STATEMENT

The Board is of the view that entering into the Deed of Novation is in the best interest of the Company and will make further announcements of any material developments in accordance with the requirements of Bursa Malaysia Securities Berhad.

This announcement is dated 4 March 2026.