EA Technique (M) Bhd has been loss-making since the end of the financial year 2020, is said to be considering a substantial stake acquisition by Tan Sri Rashid Manaf, the co-founder of Eco World Development Group Bhd. EATech's current financial status has prompted the need for a financial regularisation plan to be submitted to the stock exchange. Tan Sri Rashid may be acquiring shares from Sindora Bhd, a subsidiary of Johor Corporation (JCorp), which holds a 50.05% stake in EATech, making him a potential white knight for the company.
EATech has yet to reveal the details of its proposed scheme of arrangement that was approved by its creditors in December 2022. In an attempt to turn the company around, EATech has been trying to sell its vessels. It has managed to dispose of some and obtain court orders for others to be sold. The company has appointed Ernst & Young PLT as its financial advisers to assist in the proposed scheme of arrangement.
Despite its financial struggles, EATech's share price has been on an upward trend since September 2022, climbing from a low of 3.5 sen to a high of 34.5 sen. On Oct 27, 2022, EATech announced that its wholly-owned subsidiary Libra Perfex Precision Sdn Bhd had been awarded a contract by Petronas Floating LNG 1 (L) Ltd (PFLNG1) for the provision of tugboat services. The contract is worth about RM41.06 million, excluding the option period and is for a fixed term of two years, with an option to extend by an additional two years upon expiry.
The strong movement of EATech began on Sept 19, 2022. At that time, there was news from the company regarding the disposal of a marine vessel for RM18.69 million.
Reference : EA Technique disposes of marine vessel for RM18.69 mil
EATech has agreed to sell a marine vessel to a UAE-based vessel operator for RM18.69 million. This is part of the company's plan to dispose of three marine vessels for about RM55.2 million, which was approved by its shareholders at a meeting held on September 12. The sale will allow the company to streamline its fleet of vessels and get rid of non-profit generating assets. Following this news, EA Technique's share price rose by 55.56% on September 19th.
In another surprising announcement, EATech revealed that it has been awarded two contracts worth a total of RM53.76 million from Petronas' Petronas Floating LNG 1 (L) Ltd (PFLNG1) facility. This is welcome news for the company, which was currently classified as a PN17 company, as it has now secured a significant contract with Petronas.
Reference : EA Technique bags vessel provision jobs from Petronas worth RM54 mil
EA Technique (M) Bhd has secured two contracts from Petronas' PFLNG1 facility worth a total of RM53.76 million. The contracts were awarded to the company's subsidiary, Libra Perfex Precision, for tugboat and emergency standby vessels services for a fixed term of two years with a two-year extension option. These contracts are expected to contribute positively to the company's earnings beyond the financial year ending on Dec 31, 2023. EA Technique's share price remained unchanged at seven sen on Oct 27, valuing the group at RM37.14 million.
In conclusion, EATech is facing a challenging financial situation, and the potential acquisition by Tan Sri Rashid Manaf could be a lifeline for the company. The proposed scheme of arrangement, once revealed, could give investors and stakeholders a better idea of how EATech intends to turn its financial performance around.
Perhaps there will be another announcement made soon. Let's see how the company progresses.
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