KUALA LUMPUR (April 9): Sarawak Cable Bhd (SCB) said the group and its wholly-owned subsidiary Universal Cable (Sarawak) Sdn Bhd have been sued by two banks over a total owed sum of RM95.53 million.

The suits were filed by Hong Leong Bank Bhd (HLB) and Hong Leong Bank Islamic Bhd (HLISB) at the Kuching High Court on Monday, SCB said in a bourse filing on Tuesday.

The Practice Note 17 (PN 17) group said that the suits are not expected to have any material operational impact on the group and that it is in negotiation with the banks to resolve the matter.

“Except for a marginal difference on the amount claimed by the plaintiffs, the group has already recognised in its account the amount owing to the plaintiffs,” it added.

SCB has had multiple challenges with its creditors in the past. In September 2023, its scheme of arrangement for debt settlement, details of which were not disclosed, was rejected by its creditors.

Creditors involved in the scheme include HLB, Bank Muamalat Malaysia Bhd, AmBank (M) Bhd, CIMB Bank Bhd, Malayan Banking Bhd, Bangkok Bank Bhd, OCBC Bank (Malaysia) Bhd and Universal Trustee (Malaysia) Bhd.

Subsequently, in October 2023, SCB received two winding-up petitions served by OCBC for outstanding sums amounting to RM74.51 million as at Sept 15, 2022.

Two months later, the group announced that it had found a white knight in UK-based Serendib Capital Ltd, which had prepared a war chest of RM250 million to help pare down its debts and recapitalise the cable manufacturer.

At the time, it disclosed that Serendib Capital would assist SCB in the formulation of a comprehensive rescue plan and subsequent negotiations with SCB creditors, adding that the funding requirement would be provided through a mix of debt repayment and working capital injection once the plan has been finalised.

The current status of the deal remains unknown.

For its second quarter ended Nov 30, 2023, SCB saw its net loss widen to RM35.82 million from RM11.74 million a year earlier. Quarterly revenue was down 26.5% to RM107.46 million from RM146.12 million.

The group attributed the loss mainly to its cables and wires segment, which it said was operating at a lower capacity using internal resources as its credit and financing lines were on a standstill due to ongoing negotiations with its creditors on a new restructuring plan.

As at Nov 30, 2023, SCB’s loans and borrowings amounted to RM393.77 million, while its cash and cash equivalents stood at RM17.53 million.

At Tuesday’s market close, SCB's share price was down half a sen to 17 sen, valuing the group at RM65.94 million. Year to date, the counter has fallen by 24 sen or 58.5%.