SOME serious trouble is brewing at SCOMI GROUP BHD after a falling out with the company’s two white knights.
It is in danger of losing its gem - Scomi Energy Services Bhd - its oil and gas arm and it is going all out to try to prevent that from happening.
Just about seven months ago when they came in as the saviours, now prominent businessman Tan Sri Wan Azmi Wan Hamzah and Gelombang Global Sdn Bhd are being slapped with lawsuits that are seeking to prevent them from invoking their rights over Scomi Group’s defaulting on two loans from them.
Gelombang Global is a vehicle of former Renong Bhd managing director Datuk Mohd Zakhir Siddiqy Sidek. He is the sole shareholder of United Flagship Sdn Bhd, which in turn, is the sole shareholder of Gelombang Global.
The Kuala Lumpur High Court had on Thursday, granted an ad-interim injunction to restrain Malaysian Trustees Bhd to transfer the pledged shares.
Nevertheless, there was an off-market transaction of 423.96 million Scomi Energy shares at midday yesterday at 5.2 sen per share, which was 0.8 sen below the midday price of 6 sen.
The shares accounted for an 18.1% stake in Scomi Energy. But it was unsure who the stake went to and who sold the stake.
Nobody has got that kind of stake except for Scomi Group, of which 37.17% is held in a pledged securities account by Malaysian Trustees.
Scomi Group filed lawsuits against Wan Azmi and Gelombang Global to restrain them from demanding for the repayment nor to call on the transfer of shares in Scomi Energy.
Malaysian Trustee was also named the second defendant in both suits.
Both Wan Azmi and Gelombang Global came up with RM21mil each as loans for Scomi Group in on July 19 last year, which were securitised against a stake in Scomi Energy.
The total loan of RM42mil was securitised against a total of 870.47 million of Scomi Energy shares, which represents a stake of 37.17%.
The weighted average market price of the pledged shares at that point of time was 9.65 sen, which came up to a total of RM84mil or double the collateral cover.
In a worse case scenario, Scomi Group may eventually lose control of Scomi Energy, which will see its 65.63% stake diminish to only 28.46%.
This may see Wan Azmi and Gelombang Global emerging as the two new substantial shareholders, each holding 18.59%.
Scomi Group defaulted in its bullet repayment of RM21mil each to the two parties on Jan 18.
Wan Azmi sent a letter of demand to Scomi Group on Jan 20 through his lawyers, demanding for RM21.86mil which was due and payable on Jan 17.
Gelombang Global sent a similar letter to the company, requesting it to make immediate full repayment of RM21mil plus accrued interest of RM854,000.
This led to Wan Azmi and Gelombang Global invoking their rights by each giving Malaysian Trustees Bhd, whom the shares were pledged with, to procure the transfer the pledged shares.
Scomi Group had a total loan of RM45mil, including a RM3mil advancement from the group’s own chief executive officer Sammy Tse, which were meant to be used for part repayments for the advancements from Scomi Energy of RM11mil, RM4.89mil for repayment to non-trade creditors, RM28.07mil for working capital and the remaining RM1.05mil expenses related to the proposals, which include the reduction of its issued share capital from RN224.96mil to RM3mil and a consolidation of every four shares to one.
And as far as some Scomi Group shareholders are concerned, they are not really bothered if Scomi Group holds Scomi Energy or not because both companies have been loss making at least for the past three years.
“At least with two individuals running Scomi Energy instead of Scomi Group, things may turn out to be better, ” a source said.
Without Scomi Energy, Scomi Group is left with literally nothing. Looking its first quarter results for the period ended Sept 30 last year, Scomi Group’s entire revenue of RM107.89mil came from Scomi Energy.
It also attempted to privatise Scomi Energy in recent years but failed to do so. Scomi Group managed to privatise Scomi Engineering Bhd in 2018, delisting it from Bursa Malaysia. It had just been wound up on Jan 30.
Of late, things have brighten up for Scomi Engineering after it resolved its issues with Prasarana Malaysia Bhd for the supply of four-car train sets for the Rapid KL Monorail.
Speculation is rife that the government may revive a monorail project from Serdang to Putrajaya. If that happens, then the prospects for Scomi Group will be better.
Both Scomi Group and Scomi Energy are Practice Note 17 (PN17) companies and like its parent, the latter’s subsidiary KMCOB Capital Bhd also defaulted on its bonds and has requested for time extension from its bondholders for the RM55mil worth of Series E of the guaranteed serial bonds.
Bursa Malaysia rejected Scomi Energy’s application for a waiver from being classified as PN17 recently on Jan 21 on concerns about the company’s sustainability and growth potential of the existing and remaining business and the ability to generate sufficient revenue and profitability.
There seems to be no end to the debt issues in the cash strapped Scomi Group. It also leaves many wondering why Wan Azmi and Mohd Zakhir came into the company when there were so many other oil and gas and engineering companies for sale.
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