Scomi Engineering gets nod to merge with parent company

KUALA LUMPUR: Scomi Engineering Bhd (ScomiEng) has received the approval from the non-interested shareholders to merge with the parent company, Scomi Group Bhd.

The approval was obtained at ScomiEng court convened meeting which was held on Friday.

“ScomiEng will be making an application to the court for the sanction of the ScomiEng scheme under Section 366 of the Act in due course,” it announced to Bursa Malaysia.

Apart from Scomi, the other shareholders in ScomiEng hold small stakes of less than 3%.

Bara Aktif Sdn Bhd and Eagletron Venture Sdn Bhd hold 2.62% and 2.29% equity interest respectively. The remaining shareholders hold less than 2%.

Under the proposed merger, seven ScomiEng shares would be exchanged for 10 consolidated Scomi shares. 

Earlier on Friday, StarBiz reported the merger would likely go through because the engineering company was loss-making and needed a bigger balance sheet to see through its projects.

However, on Thursday, Scomi Energy Services Bhd's institutional shareholders had rejected the proposal to merge with Scomi Group following the rebound in crude oil prices.

To recap, the proposed merger, first announced in August 2017, involved three listed entities on Bursa Malaysia – Scomi Group, Scomi Energy and ScomiEng.

The merger is expected to streamline Scomi Group’s operations and finances, as the group refocuses its strategy on rail and renewable energy.

Scomi Group is the single largest shareholder in Scomi Energy and Scomi Engineering, with equity interests of 65.64% and 72.3%, respectively.

Under the proposed exercise, shareholders of Scomi Energy and Scomi Engineering will be offered the opportunity to swap their holdings for new Scomi Group shares. Both Scomi Energy and Scomi Engineering would then surrender their listing status.

The corporate restructuring will see the total debt currently owed by Scomi Engineering (RM526mil) and Scomi Energy (RM245mil) being consolidated under its parent company.

The proposed merger, first announced in August 2017, involves three listed entities on Bursa Malaysia – Scomi Group, Scomi Energy and Scomi Engineering Bhd

The merger is expected to streamline Scomi Group’s operations and finances, as the group refocuses its strategy on rail and renewable energy.

Scomi Group is the single largest shareholder in Scomi Energy and Scomi Engineering, with equity interests of 65.64% and 72.3%, respectively.

Under the proposed exercise, shareholders of Scomi Energy and Scomi Engineering will be offered the opportunity to swap their holdings for new Scomi Group shares. Both Scomi Energy and Scomi Engineering would then surrender their listing status.

The corporate restructuring will see the total debt currently owed by Scomi Engineering (RM526mil) and Scomi Energy (RM245mil) being consolidated under its parent company.