SERBA Dinamik Holdings Bhd must be praised for having an incredibly high sense of self-belief.

Even amid all its financial woes, the global integrated oil & gas (O&G) outfit is confident that the eventual winding up of its direct and indirect wholly owned subsidiaries can be averted as it has “one or more scheme(s) of arrangement” up its sleeve.

“(This) is to seek a constructive resolution to the company and its subsidiaries’ payment obligation,” Serba Dinamik said in a reply to Bursa Malaysia’s queries pertaining to the winding up petition served by six syndicated lenders on the company and its three wholly owned direct and indirect subsidiaries.

“The proposed scheme(s) of arrangement will address 100% of the amounts to creditors of the SD Group including the petitioners.”

The six lenders are HSBC Amanah Malaysia Bhd, Ambank Islamic Bhd, Bank Islam Malaysia Bhd, MIDF Amanah Investment Bank Bhd, Standard Chartered Saadiq Bhd and United Overseas Bank (M) Bhd.

The subsidiaries concerned are Serba Dinamik Group Bhd (SDGB), Serba Dinamik Sdn Bhd (SDSB) and Serba Dinamik International Ltd (SDIL)

“The board of directors of the company wishes to state at this juncture that the company and its group of companies have sufficient operation cash flow capability to continue to perform existing contractual obligations in respect of non-borrowing related contracts,” added Serba Dinamik.

While not intending to undermine the group’s ability to re-pay its syndicated loan to the six lenders, one wonders how long a time frame Serba Dinamik would need to execute its proposed scheme(s) of arrangement to its/their fruition.

While the company is still grappling to pay the RM16 mil compound (in lieu of facing court charges) imposed by the Securities Commission (SC) on April 13 – its two-week payment extension deadline is understood to be expiring tomorrow (May 12) – it is mind boggling as to how Serba Dinamik is able to find the RM99 mil instalment sum owed under its Master Murabahah Agreement (MMA) dated Dec 17, 2019.

Following a series of defaults, Serba Dinamik said the syndicated lenders had on March 18 issued an acceleration notice stipulating that the total outstanding sum then stood at RM1.78 bil in addition to US$42,376.67 being the unpaid facility agent’s annual fee due on Dec 17, 2021.

The six syndicated lenders aside, it has to be borne in mind that Serba Dinamik is also saddled with defaults linked to other financiers.

On Dec 15 last year, the company acknowledged that its unit SD International Sukuk Ltd has defaulted on its payment of interest due on December 9 pursuant to the US$300 mil trust certificates amounting to US$6.5 mil.

In an exchange filing, Serba Dinamik said the company was unable to meet its obligation to pay the interest in a timely manner due to cash flow constraints.

Amid its current status as a Practice Note 17 (PN17) listed issuer, it seems that many odds are stacked against the once darling O&G stock unless its creditors are kind enough to provide leeway by extending the payment period indefinitely although chances of that happening are very slim indeed.

At 9.31am, Serba Dinamik was trading at a new all-time low of 6 sen (down 1.5 sen or 20%) with 75.84 million shares traded, thus valuing the company at RM224 mil. – May 11, 2022