YESTERDAY’S (March 24) withdrawal of application by its four subsidiaries from being placed under judicial management in order to help restructure their financial health, has raised concerns over the bigger “financial conundrum” that Serba Dinamik Holdings Bhd is facing.
According to theedgemarkets.com, the application for withdrawal was submitted by Serba Dinamik Group Bhd, Serba Dinamik Sdn Bhd, SD Control Sdn Bhd and Serba Dinamik Development Sdn Bhd on Wednesday (March 23) through Messrs Syed Ibrahim & Co.
Following their withdrawal bid, judicial commissioner Nadzarin Wok Nordin who presided over the proceedings, struck off all their judicial management applications and ordered the four to pay a total cost of almost RM300,000 to the financial institutions and creditors who were opposed to their initial applications.
Serba Dinamik cited strong opposition from creditors and financial institutions that had lent the subsidiaries money as the reason for the withdrawal of the applications. Its legal counsel Mak Lin Kum told the court that Serba Dinamik is now considering a scheme of arrangement and will inform its creditors of the plan.
During earlier proceedings in the past month, the court was told that the four companies had liabilities of RM6.45 bil while their assets were said to be worth RM7 bil. The Serba Dinamik subsidiaries had on Feb 11 made an announcement to Bursa Malaysia that they had applied to be under judicial management to revive the financial health of the group.
Set against a slew of legal charges by market regulators for offences ranging from submitting false statement to Bursa Malaysia Securities Bhd, an offence under section 369(a)(B) of the Capital Markets and Services Act 2007 (CMSA), this latest development obviously does not augur well for the financial future of the integrated global oil & gas (O&G) outfit which has found itself slipped into the Practice Note 17 (PN17) status on Jan 6.
Though the company has 12 months to regularise its financial condition, failing which it could be delisted from Bursa Malaysia, it had also on Dec 15 last year defaulted on its US$222.22 mil (RM939.77 mil) sukuk (Islamic bond) – an incident that may significantly impact the group’s financial performance.
Recall that the group – in responding to queries by Bursa Malaysia – said the default also means the sukuk holders have the right to seek immediate payment for 25% of the outstanding amount of the Islamic bond which was supposed to mature in May 2022.
A stock market observer has expressed concern that the withdrawal of judicial management process would only increase the likelihood of the group’s assets “going under the hammer or trigger fire sales to offset the mountains of debt amassed by the subsidiaries”.
“For the sake of its retail investors who have been stuck with its stocks for five months now, we can hope only that Serba does not walk straight into the path of Sumatec Resources Bhd or Sapura Energy Bhd,” he pointed out.
For the record, PN17 Sumatec was delisted from Bursa Malaysia’s Main Market yesterday pursuant to paragraph 16.11(2)(d)(ii) of the Main Market Listing Requirements which states that the stock market operator shall de-list a listed issuer upon the winding up of the latter.
In a Dec 27, 2021 filing, Sumatec said there was no legal challenge or proceedings filed against the winding-up order granted by the High Court.
“The liquidator is of the view that the company is unable to regularise the financial position in accordance with PN17 of the (Main Market Listing Requirements). As such, the liquidator does not have any objection on the delisting of the company as per the letter,” it added.
Meanwhile, Sapura Energy is grappling with putting its head above the water after it recently posted a kitchen sinking net loss of RM8.9 bil in its financial year ended Jan 31, 2022 – the biggest loss for any government-linked company (GLC) in Malaysia’s history.
Having to face dozens of bankruptcy claims filed by its vendors, Sapura Energy has seen its stock price nosedived from around 80 sen prior to the 14th General Election (GE14) to 3.5 sen currently.
Serba Dinamik was last transacted at 35 sen at the close of the mid-day trading on Oct 22 last year prior to the trading suspension of its shares/warrants, hence giving the company a market capitalisation of RM1.3 bil. – March 25, 2022
https://focusmalaysia.my/will-serba-walk-in-sapura-energy-sumatecs-shadow/
