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CIMIC Group Limited Annual Report 2016 |
Financial Report
Notes continued
for the 12 months to 31 December 2016
8. TRADE AND OTHER RECEIVABLES
CONTINUED
On 9 February 2016 the Consortium formally issued a Notice of Dispute to Chevron in connection with the Gorgon Contract relating
to the CORs. Following a period of prescribed negotiation, the parties have entered a private arbitration as prescribed by the
Gorgon Contract. As the Gorgon Contract does not specify a time limit within which the process must be determined, there can be
no certainty as to when the matter will be finalised.
On 20 August 2016, in order to pursue further its entitlement under the contract, CIMIC Group commenced proceedings in the
United States against Chevron Corporation and KBR Inc. The commencement of the proceedings has no effect on the contract
process or CIMIC’s entitlement to the amounts under negotiation / claimed in the aribtration.
The Group’s share of the total amount claimed equals approximately $1.86 billion. CIMIC confirms its view that CPB remains entitled to
that amount plus interest (being an amount exceeding $500 million that will continue to accrue) and costs (Total Entitlement).
CIMIC has only recognised revenue equal to the costs incurred in respect of the Gorgon Contract in accordance with the relevant accounting
standard, AASB 111, resulting in an amount equal to $1.15 billion (approximately 50% of the Total Entitlement) being recognised as a
Contract debtor at 31 December 2016 (Contract debtors).
2
The Group has the following trade and other receivables relating to HLG Contracting LLC (formerly known as Al Habtoor Leighton LLC)
(HLG Contracting):
loan receivables:
-
non-current interest free shareholder loans provided to HLG Contracting of US$148.8 million (31 December 2015: US$115.2
million) equivalent to $206.6 million (31 December 2015: $157.8 million), maturing on 30 September 2018;
-
non-current interest bearing loans of US$497.7 million (31 December 2015: US$415.0 million) equivalent to $691.3 million
(31 December 2015: $568.5 million), maturing on 30 September 2018; and
-
the repayment of the above loans is subject to certain restrictions as a result of the loans being subordinate to other external
debt held by HLG Contracting. Repayment of these amounts is expected to occur after the settlement of HLG Contracting’s
external debt in September 2018, or where HLG Contracting receives prior written consent from the financier, or where a
permitted payment under the financing arrangement occurs; and
non-current interest receivable of US$104.6 million (31 December 2015: US$85.0 million), equivalent to $145.3 million (31 December
2015: $116.4 million), is receivable from HLG Contracting on the interest bearing shareholder loans.
3
The non-current tax asset of $28.9 million
(31 December 2015: $25.2 million) represents the amount of income taxes recoverable from
the payment of tax in excess of the amounts due to the relevant tax authority not expected to be received within twelve months after
reporting date.
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