CTCI Corp., Taiwan’s largest engineering services provider, reported a first-quarter net loss of NT$1.22 billion ($37 million) after setting aside provisions for a troubled US renewable fuels project that went into bankruptcy restructuring.
The Taipei-based company disclosed that its US subsidiary is facing difficulties collecting NT$19.6 billion ($592 million) in receivables from Bakersfield Renewable Fuels (BKRF), whose parent company Global Clean Energy Holdings (GCEH) filed for Chapter 11 protection last month.
Chairman John Yang said yesterday that CTCI recognized an expected credit impairment of NT$3.1 billion in Q1, resulting in a net negative impact of NT$2.6 billion after tax benefits. This drove the company to a quarterly loss of NT$1.52 per share, a stark contrast to its historical profitability.
The dispute stems from a 2021 engineering, procurement, and construction (EPC) contract for retrofitting an oil refinery into a biofuel facility. CEO Michael Lee noted that disagreements over contract scope and terms eventually led BKRF to terminate the agreement in October 2024, prompting CTCI to initiate arbitration proceedings.
Despite these setbacks, CTCI maintains that the outstanding receivables, currently valued at NT$16.7 billion after discounting, should be partially recoverable in future years. The company plans to strengthen its financial position through capital increases and by transferring certain cash-generating projects to its subsidiary ECOVE Environmental Corporation.
Yang emphasized that after analyzing the contract and legal requirements with external counsel, CTCI’s US subsidiary continued work despite payment issues to avoid potential breach of contract claims that could have resulted in greater liability.
