SESB shareholders, in an EGM yesterday, agreed to the sale of its 100% equity interest in Scomi Oilfield Ltd together with nine of its subsidiaries and 48% equity interest in Scomi KMC Sdn Bhd to Cahya Mata Oiltools Sdn Bhd.
The disposal includes SESB’s equity interest in Scomi KMC Sdn Bhd, Scomi Oiltools Gulf WLL, its property in Dataran Prima and its inventories and equipment to Oiltools international Sdn Bhd, a statement by Scomi Energy said.
“This disposal of the oilfield services business is part of the rehabilitation of SESB in line with developing its regularisation plan,” SESB’s CEO Amirul Baharom said.
SESB has been classified as a Practice Note 17 (PN17) company by Bursa Malaysia since Oct 31, 2019 and is required to submit a regularisation plan to uplift its PN17 status by Nov 30, 2022.
SESB had undertaken several initiatives towards rehabilitation of the company after its PN17 trigger and these included judicial management, a corporate recovery mechanism accorded to companies in financial distress.
However in view of the complexity of the financial liabilities it has, SESB decided it should review the option of disposing of its assets in the marine and oil and gas industry to allow for a revamp of its business.
“Rather than face the risk of a group wide appointment of receivers and managers by our lenders, which would be vastly detrimental to the company, we made the decision to monetise the potential of our marine and oilfield services businesses.” said Amirul.
The approved disposal will result in a new lean group structure without the contingent liabilities and risks of liquidation and de-listing, which will allow the company to explore opportunities to undertake a comprehensive regularisation plan, he added.
SESB in November 2021 disposed its marine business, PT Rig Tenders Indonesia and had in March 2022 announced the proposed disposal of its oilfield services business.
This disposal is expected to be completed in Aug 2022, it said.
SESB’s noted its regularisation plan may pave the way eventually to include new businesses injection or capital injection moving forward.
“Whichever path is chosen, we will ensure the plan is viable, sustainable and has growth prospects that will allow for the continued listing of Scomi Energy.
“However, it is premature to comment on the specifics and we will announce details once the plan is finalised,” Amirul said.
SESB shares closed half a sen lower at 2.5 sen yesterday.