Sarawak Cable’s subsidiaries served with winding up petition by OCBC

KUALA LUMPUR (Oct 10): Sarawak Cable Bhd subsidiaries Leader Cable Industry Bhd and Universal Cable (M) Bhd received winding-up petitions served by OCBC Bank (M) Bhd on Oct 9, the cable manufacturer announced in a Bursa filing.

The winding-up petitions follow the company's failure to get its creditors’ buy-in for a scheme of arrangement involving Leader Cable and Universal Cable on Sept 26.

According to the company’s filing dated Oct 9, the petitions were presented by OCBC to the Kuala Lumpur High Court on Oct 4.

Sarawak Cable stated that Leader Cable and Universal Cable (the respondents) are indebted to OCBC (the petitioner) for a sum of RM46.158 million and RM28.352 million as at Sept 15, 2022, with interest that continues to accrue with the petitioner.

Leader Cable and Universal Cable are major subsidiaries of Sarawak Cable, with total investments of RM205.81 million. If the respondents are wound-up, the impact will be negative on Sarawak Cable, it stated in the Bursa filing.

Sarawak Cable recalled that on Sept 26, 2022, the respondents had filed an originating summons in the Kuching High Court for leave to convene a court convened meeting (CCM) with its creditors for consideration of their proposed scheme of arrangement and compromise between the respondents and its creditors.

Its subsidiaries also filed for a restraining order to halt further proceedings in any legal action or proceedings against the respondents.

OCBC did not agree with the scheme of arrangement and voted against the CCM, which was convened on September 26. Creditors, including the petitioner, rejected two of the ten debt settlement schemes.

Besides OCBC, other creditors involved in Sarawak Cable's scheme of arrangement include Hong Leong Bank Bhd, Bank Muamalat Malaysia Bhd, AmBank (M) Bhd, CIMB Bank Bhd, Malayan Banking Bhd, Bangkok Bank Bhd and Universal Trustee (Malaysia) Bhd.

“The company (Sarawak Cable) expects to incur legal fees and disbursements involved to challenge and oppose the petition and appointment of the Interim Liquidator. The company will also assess and ascertain other losses arising from this petition,” Sarawak Cable said.

As at May 31, 2023, Sarawak Cable had RM388.64 million of current loans and borrowings, but only RM37.46 million in cash and bank balances. Its accumulated losses swelled to RM283.7 million, with capital deficiency of RM63.9 million as at the date.

Sarawak Cable has been ascribed a Practice Note 17 company since Sept 30, 2022. As at Oct 9, its shares were trading at five sen, valued at RM18.29 million. It has been loss-making since the financial year ended Dec 31, 2017.