KUALA LUMPUR (Aug 8): Shareholders of Scomi Energy Services Bhd (SESB) have given the go-ahead for the disposal of its oilfield services business division for RM21 million.  

In a statement, SESB said the approved disposal consists of 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; and the disposal by Scomi Oiltools Sdn Bhd (SOSB) — a subsidiary of SESB — of its equity interest in Scomi KMC Sdn Bhd, Scomi Oiltools Gulf W.L.L, its property in Dataran Prima and its inventories and equipment to Oiltools international Sdn Bhd.

In an extraordinary general meeting on Monday (Aug 8), SESB said the sale was met with 99.985% approval, while 0.0150% voted against the proposed disposal.

“SESB has been classified as a PN17 [Practice Note 17] company by Bursa Malaysia Securities Bhd since Oct 31, 2019, and the company is required to submit a regularisation plan to uplift its PN17 status by Nov 30, 2022,” said Amirul Baharom, Chief Executive Officer of SESB.

“This disposal of the oilfield services business is part of the rehabilitation of SESB, in line with developing its regularisation plan,” he continued.

Since triggering the PN17 status, SESB has undertaken several initiatives towards rehabilitation of the company including judicial management, which is a corporate recovery mechanism accorded to companies in financial distress.

However, in view of the complexity of the financial liabilities of the company, it was decided to review the option of disposing of its assets in the marine and oil and gas industry, to allow for a revamp of its business.  

Thus, on Nov 16, 2021, SESB completed the disposal of its Marine business, PT Rig Tenders Indonesia, as a precursor to its PN17 regularisation plan and on  March 17, 2022, announced the proposed disposal of its oilfield services business.

“Rather than face the risk of a group wide appointment of receivers and managers by its 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 continued.

The regularisation plan, which would need to be submitted to Bursa Malaysia, now has various opportunities which may potentially include new businesses injection or capital injection.

“Whichever path is chosen, we will ensure that the plan is viable, sustainable and has growth prospects warranting the continued listing of SESB. However, it is premature to speculate on the specifics and we will announce details as the plan is finalised,” he added.

SESB has two business divisions, namely drilling services and marine services. The provision of drilling fluids services and drilling waste management services falls under the drilling service division, while marine logistic services of tugs and barges for the commodity sector and offshore support vessels for the oil and gas sector fall under the marine service division.

SESB has been loss-making for the past six-consecutive years, from 2016 to 2021. Its financial year ends on June 30.  

It posted an annual net loss of RM2.73 million for FY16, followed by RM126.41 million for FY17, and further swelled to RM219.06 million for FY18.

Subsequently, it reported a net loss of RM95.69 million for FY19, followed by RM187.5 million for FY20 and RM214.16 million for FY21.

Meanwhile, its cumulative nine-month ended March 31, 2022 (9MFY22) showed it continued to bleed, with a net loss of RM5.92 million.

Shares in SESB closed down half a sen or 16.67% to 2.5 sen on Monday (Aug 8), for a market capitalisation of just RM12 million.