Sumatec's liability as Semado's guarantor not expected to exceed 5% of its net assets

KUALA LUMPUR: Sumatec Resources Bhd’s liability as corporate guarantor for Semado Maritime Sdn Bhd, its associate company that recently defaulted on its loan payments, is expected to be less than 5% of its net assets.

The oil and gas company told Bursa Malaysia on Friday that Bank Pembangunan Malaysia Bhd and Semado had in June agreed on a total sum of RM73.8mil as the full and final settlement of the loan.

“Under the corporate guarantee, Sumatec could be liable for the shortfall between the outstanding loan amount and the net realisable value of the vessels, if any,” it said,

“The vessels” refer to oil tankers Semua Mutiara and Semua Muhibbah, for which Bank Pembangunan’s lawyers had earlier this month issued a warrant of arrest.

In return for the release of the vessels, Sumatec said the bank was claiming settlement of principal sum of RM143.32mil (plus RM100,000 in cost), or an alternative security in the sum of RM165.21mil by way of either a first class bank guarantee or a letter of undertaking from a P&I club (mutual insurance association that provides marine insurance through risk pooling) within seven days (the date has lapsed).

In its latest announcement, Sumatec said a desktop valuation carried out by an independent ship valuer last month estimated the market value at US$7mil (about RM29mil) per vessel. 

“Based on the final settlement sum of RM73.8mil and the desktop valuation which is subject to a final full inspection, the shortfall is expected to be less than 5% of the company’s net assets as at June 30, 2016,” it added.

Sumatec pointed out that it had net current assets of RM140mil as at June 30. Based on the 5% figure, Sumatec expects the shortfall to be less than RM7mil.

A quick calculation by StarBiz, however, shows that the difference between the final settlement sum and the desktop valuation of the two vessels is RM15.8mil.

Sumatec announced the default by Semado, owned by Semua International Sdn Bhd (SISB) in which Sumatec has a 49% equity interest, on Wednesday.

Sumatec, whose single biggest shareholder is Tan Sri Halim Saad, said then that the default in payment on Oct 18 and 19 was due to the delay in completing the sale of the vessels that were “arrested.”

In Friday’s announcement, Sumatec explained that the finalisation of the sale took longer than anticipated because Semado wanted to ensure that it obtained the best price for the vessels.

“Semado is now evaluating all proposals received and making arrangement for inspection of the vessels,” it said.

Semado is also discussing with Bank Pembangunan to revert to the final settlement sum agreed earlier in June as well as to grant extension of time to complete the sale of the vessels.

“The board, after having inquired into the affairs of the company (Sumatec), is of the opinion that the company will be able to pay all its debts as and when they fall due within the period of 12 months from the date of this announcement,” Sumatec said.

In a separate filing on Friday, Sumatec announced the resignation of its chief financial officer Roshidah Abdullah “to pursue personal interest” effective Oct 31, She had been CFO since April 1, 2013.

Sumatec shares closed unchanged at 6 sen on Friday, with 45.89 million shares changing hands.