KUALA LUMPUR (June 5): TH Heavy Engineering Bhd said today it will undergo a kitchen-sinking exercise so it can start with a clean slate and exit the Practice Note 17 (PN17) status by the first quarter of next year.

Chief executive officer Suhaimi Badrul Jamil said the group is now working to submit its regularisation plan to Bursa Malaysia by the Oct 26 deadline.

"We'll have to impair a lot of things, mainly (our) floating production storage and offloading (FPSO) units. There is a fair bit of kitchen-sinking that needs to be done in order to clean up our balance sheet and hopefully by then we will return to the black," he told reporters after the group's annual general meeting today.

On April 28 last year, TH Heavy was classified as a PN17 company after its auditors had expressed a disclaimer of opinion on the going concern assumption in the audited financial statements for the financial year ended Dec 31, 2016.

TH Heavy narrowed its net loss to RM14.75 million in the first quarter ended March 31, 2018 (1QFY18) from RM21.18 million a year ago. However, quarterly revenue fell 78.4% to RM186,000 compared with RM2.25 million in 1QFY17.

TH Heavy shares ended the morning session down 0.5 sen or 9.09% at 5 sen, with 355,000 shares done, bringing a market capitalisation of RM56.06 million.