KUALA LUMPUR: Shares of Muhibbah Engineering Bhd fell in early trade on Thursday, June 16 after Asia Petroleum Hub (APH), the developer and operator of the APH oil terminal in Johor, was placed under receivership.

As one of the contractors for APH, Muhibbah was awarded the marine piling and jetty works worth RM820 million.

At 9.27am, Muhibbah was down six sen to RM1.84 with 2.50 million shares done.

The FBM KLCI fell 2.59 points to 1,553.60. Turnover was 81.31 million shares valued at RM75.08 million. There were 54 gainers, 187 losers and 154 stocks unchanged.

CIMB Research said the receivership status for the APH project was a negative surprise. However, it should not be a major concern at this juncture as APH is likely to negotiate for more time to resolve the matter and rope in a new investor.

'The worst-case scenario for Muhibbah is a write-down of the RM300 million due from APH, which would push Muhibbah into losses for FY11. However, there is no impact on RNAV as the amount is reflected as liabilities.

'As we view a write-down as remote at this juncture, we maintain our forecasts and RM2.75 target price, which is pegged to an unchanged 10% discount to RNAV,' it said.