KUALA LUMPUR (July 25): Serba Dinamik Holdings Bhd said its creditors have approved the scheme of arrangement proposed by the group and its four subsidiaries, with between 83% and 100% creditors voting in support of it.

The group itself garnered 95.74% support from its creditors, while its subsidiaries Serba Dinamik Group Bhd (SDGB) received 100%, Serba Dinamik Sdn Bhd (SDSB) received 99.21%, SD Controls Sdn Bhd received 86.43% and Serba Dinamik Development Sdn Bhd (SDDSB) secured 83%.

The voting was held at a court convened meeting at the Ideal City Convention Centre, Shah Alam, on Monday morning (July 25).

A source familiar with the matter told The Edge that the scheme of arrangement will proceed as more than 75% votes from its creditors were received.

It is understood that under the scheme of arrangement, creditors will get 15% of what is owed by Serba Dinamik, SDGB and SDSB, with the balance to be worked out in another scheme of arrangement possibly by the end of the year.

“The balance 85% of the outstanding debts shall be dealt with in subsequent schemes as more assets are sold by entities within Serba Dinamik and other cash flow sources arising from existing and new businesses from within the Serba Dinamik group,” the scheme of arrangement sighted by The Edge stated.

The other two companies, SD Controls and SDDSB, will fully repay their debts, according to the scheme.

SD Controls, SDDSB and SDSB are subsidiaries of SDGB, which is in turn a subsidiary of Serba Dinamik.

It was reported last month that the creditors had reached a settlement with Serba Dinamik with the scheme of arrangement and would hold their applications for a winding-up petition against Serba Dinamik and its subsidiaries, provided the companies do not default on the payment of debts, as proposed under the scheme. This resulted in a consent order being recorded at the High Court when the application for the scheme of arrangement came up for hearing before Justice Atan Mustaffa Yussof Ahmad.

The lenders — comprising six syndicated and bilateral lenders, namely HSBC Amanah Malaysia Bhd, Ambank Islamic Bhd, Bank Islam Malaysia Bhd, MIDF Amanah Investment Bank Bhd, Standard Chartered Saadiq Bhd and United Overseas Bank (Malaysia) Bhd — had filed the winding-up petition against the companies in April after they failed to service their RM1.2 billion syndicated term financing.

Subsequently, Serba Dinamik and its subsidiaries filed for a restraining order against the creditors and proposed the scheme of arrangement in June to restructure the group's debt obligations, which proposed "a 100% return to the company's creditors". At that time, the group said it had identified "some assets for immediate sale" to generate the cash flow required to meet the group's liabilities.

Serba Dinamik is also facing another suit by Malaysian Trustees Bhd, the trustee of Serba Dinamik’s RM100 million Islamic Commercial Papers (ICP), which the company had defaulted on. The papers are being held by Amanahraya Investment Management Sdn Bhd (ARIM), a wholly-owned unit of Amanah Raya Bhd.

In April, the group, alongside four senior company officials were fined a total of RM16 million for submitting false statements regarding its RM6.01 billion revenue in the 12-month period ended Dec 31, 2020 (FY2020)

Shares of Serba Dinamik rose half a sen or 6.25% to settle at 8.5 sen on Monday, giving the group a market capitalisation of RM316.81 million.