In a statement, Scomi Group said it proposed to undertake a corporate exercise involving a share consolidation of every two existing ordinary shares into one ordinary share, a bonus issue of seven warrants for every 10 consolidated shares held, and the privatisation of its two subsidiaries - Scomi Energy Services Bhd (SESB) and Scomi Engineering Bhd (SEB) - by way of a members’ scheme of arrangement involving a share swap and an issuance of warrants.
Scomi Group currently holds 65.64% equity interest in SESB and a 72.33% stake in SEB.
Under the proposed scheme, shareholders of SESB and SEB will swap their respective shareholdings for new Scomi Group shares, resulting in both SESB and SEB being wholly owned by Scomi Group.
SESB shareholders will get three new Scomi Group shares for every five shares held in SESB. SEB shareholders, meanwhile, will receive 10 new Scomi Group shares for every seven SEB shares.
Additionally, a Scomi Group warrant will be issued for every nine new Scomi Group shares issued to SESB shareholders for a total consideration of RM107.84mil, with an implied offer price of 13.4 sen per SESB share.
SEB shatreholders will receive a Scomi Group warrant for every 10 new Scomi Group shares they get, for a total consideration of RM29.93mil with an implied offer price of 31.6 sen per SEB share.
Consequently, the listing status of both SESB and SEB will be surrendered.
Scomi Group said the proposals were aimed at creating a consolidated Scomi entity through the merger of the three listed, thus strengthening the group’s balance sheet in the midst of a challenging business environment and facilitating its business expansion.
It said these proposals would reduce administrative and operational expenses and slash duplication that existed with the three listed entities, leading to improved efficiency across its businesses.
Scomi Group said the new group structure would provide shareholders direct access to its business going forward.
For SESB’s and SEB’s shareholders, the privatisation is expected to provide them with the opportunity to realise the value of their equity at a premium and participate in future growth of the new group. This will also provide SGB with a broader shareholders base and better shareholders spread.
“The management of Scomi Group is optimistic that the proposals provide the group with a stronger financial base and will also accord the group flexibility in allocating resources between its business segments. This is the key to Scomi Group’s goal to develop new growth areas, namely in renewables and chemicals,” Scomi Group said.