KUALA LUMPUR (Jan 31): Practice Note 17 (PN17) outfit Scomi Energy Services Bhd said it no longer has any defaults in payment following the resolution of its debt obligations to its secured lenders.

This comes after the completion of the sale of the company’s drilling services business on Sept 6 last year for RM21 million, with the bulk of proceeds used to repay the defaulted debt.

“The company no longer has default in payment pursuant to Paragraph 9.19A of the Main Market Listing Requirements of Bursa Malaysia Securities,” Scomi Energy said in a filing on Tuesday (Jan 31).

Scomi Energy first defaulted in December 2019, after its indirect wholly owned unit KCOB Capital Bhd defaulted in parts of its Series E bonds amounting to RM55 million.

That episode subsequently triggered cross default in the company, bringing the total to RM147.8 million.

Scomi Energy fell into PN17 status in January 2020, after having triggered the criteria in October 2019, when its shareholders’ equity on a consolidated basis fell below 50% of its issued share capital.

The company subsequently applied for judicial management in April 2020.

It then disposed of multiple subsidiaries for a combined sum of RM21 million. This includes its core business in offshore drilling services, which provided 75% of its revenue, to several parties including subsidiaries of Cahya Mata Sarawak Bhd .

The disposal, according to Scomi Energy’s circular when it was first proposed, is conditional upon approval of its secured lenders to its scheme of arrangement.

The secured lenders that approved the disposal included Danajamin Nasional Bhd (with an outstanding debt of RM68.52 million), Malayan Banking Bhd (17.53 million), OCBC Bank (M) Bhd (RM14.99 million), Hong Leong Investment Bank Bhd (RM9.04 million), CIMB Bank Bhd (RM2.66 million), and Al-Rajhi Bank & Investment Corp (RM393,887).

The circular further said that the disposal consideration of RM21 million will enable Scomi Energy to “fully resolve the indebtedness” due to its secured lenders via a one-time debt waiver of “approximately RM122.1 million”.

With the debt default resolved, the next step for Scomi Energy — now without a core business — is to furnish a regularisation plan to the regulators by May this year, following a deadline extension by Bursa Securities.

In October last year, PJD Link (M) Sdn Bhd — owned by PJD Link Holdings Sdn Bhd and Noblemax Resources Sdn Bhd — announced plans for the reverse takeover of Scomi Energy. According to the company, it is a concessionaire of the proposed Petaling Jaya Dispersal Link.

Scomi Energy also said on Jan 5 that it intends to raise its stake in its power generation solutions unit JV Haratamas Megah Sdn Bhd to 80% (from 20%) as part of its regularisation plan.

Scomi Energy’s shareholders comprise Tan Sri Wan Azmi Wan Hamzah (18.11%), Datuk Mohd Zakhir Siddqy Sidek via Gelombang Global Sdn Bhd (12.77%), and Scomi Group Bhd (29.43%).

As of end September 2022, Scomi Energy had no debt, against a cash amount of RM15.96 million. Total liabilities stood at RM14.43 million, against total assets of RM24.31 million. 

The company carried a total equity of RM9.88 million, with retained losses of RM430.33 million, against a share capital of RM445.54 million. 

Shares of Scomi Energy closed unchanged at six sen on Tuesday, giving the company a market capitalisation of RM28.1 million.