IT may seem like an uphill battle as its share price continues to languish yet Serba Dinamik Holdings Bhd has not given up fighting to make ends meet so to speak.

Today, wholly owned subsidiary of global integrated oil & gas (O&G) outfit, Serba Dinamik Sdn Bhd (SDSB), revealed that it has strengthened its presence in the Middle East by signing a memorandum of agreement (MOA) with the United Arab Emirates (UAE). 

The primer partner of the Malaysia Pavilion at Expo 2020 Dubai claimed that the MOA is expected to generate billions in annual revenue for the company (SDSB).

Nevertheless, it is worth mentioning that SDSB is one of four direct and indirect subsidiaries of Serba Dinamik which are entangled in a slew of court hearings following the filing of an application for leave from the court to enter a scheme of arrangement and a restraining order against the group’s creditors.

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

For the record, six main financial institutions (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 (M) Bhd which are syndicated and bilateral lenders) have filed a winding-up petition against the group and its subsidiaries last month.

This followed Serba Dinamik’s failure to service its RM1.2 bil syndicated term financing. Having mooted a scheme of arrangement to restructure its debt obligations, the group said it is seeking its creditors’ approval for the scheme which proposed “a 100% return”.

Toward this end, Serba Dinamik said it has identified “some assets for immediate sale” to generate the cash flow required to meet the group’s liabilities.

First mover advantage

Back to the so-called potential money-making project that SDSB has entered into, group managing director and CEO Datuk Dr Mohd Abdul Karim Abdullah explained that the MOA inked on May 19 focuses on three core areas: (i) vertical farming; (ii) infrastructure and property development; and (iii) integrated solutions for the O&G industry.

It is estimated that vertical farming may yield a gross margin of 40%. At the moment, it is a new concept in the eyes of commercial investors.

“Vertical farming incorporates all the latest technology which every country will be able to use irrespective of the different climate and weather,” he told an interview with Bernama TV. “For infrastructure and property development, normal margin growth is in the range of 20 to 25%. The third area also typically averages in the gross margin of 20% to 25%.’

Based on current investment patterns that are increasingly moving towards zero carbon emissions, however, Abdul Karim expects the gross profit margin for O&G to reach 30% to 35%.

In fact, he noted that vertical farming is one of the key areas that SDSB is currently focusing on as food security has become a concern among world leaders.

As only a few high-tech industry players are familiar with vertical farming and its technology, Abdul Karim stated that SDSB is eager to take advantage of this opportunity.

“It’s a knowledge that is available in the market. It’s just that we have to integrate the technology and we have to get the necessary funding to roll out those things in a commercial manner,” he pointed out.

“So, we would like to be one of the leading players who understands the technology and who has the network to connect it to the respective financial institutions and also investors, to join hands together to make this food security a successful programme in the respective countries that we are working on at the moment.”

During the recent Expo 2020 Dubai, a number of private companies as well as government organisations from Central Asia and Africa had shown interest in SDSB’s technology. These organisations are in the realm of space & telecommunication technology, IT solutions and fintech, smart maintenance and mix-reality.

At 3.54pm, Serba Dinamik was unchanged at 11 sen with 44.92 million shares traded, thus valuing the company at RM410 mil. – May 30, 2022

https://focusmalaysia.my/serba-searches-for-relevance-by-strengthening-middle-east-presence/