Frankly Speaking: There is more to it than meets the eye at Sarawak Cable

TheEdge Mon, May 13, 2024 02:00pm - 5 days View Original

This article first appeared in The Edge Malaysia Weekly on May 13, 2024 - May 19, 2024

It appears that Sarawak Cable Bhd (S-Cable) (KL:SCABLE) has no shortage of willing investors or white knights to resuscitate the cable and wire manufacturer that fell into Practice Note 17 category in September 2022.

Just two days after it said on May 8 that it was “unable to agree upon an exclusive working relationship governed by a memorandum of agreement” entered into with Serendib Capital Ltd on Dec 29, 2023, S-Cable disclosed that it had “identified a strong alternative party” for its resuscitation plan.

In its May 10 announcement, it clarified that Serendib Capital and S-Cable were unable to agree on their working relationship due to a delay in proposing and implementing any debt settlement with the company’s creditors within the time frame agreed upon under the Dec 29 memorandum of agreement.

Be that as it may, the three executives of Serendib Capital are still on the board of directors at S-Cable, having been appointed to the board last December.

Back then, S-Cable labelled Serendib Capital as a white knight that had “submitted its interest in performing a resuscitation exercise” in its statement to the stock exchange. It also disclosed that Serendib Capital, with over two decades of experience in advisory and financial asset restructuring in South Asia, had a RM250 million war chest to restructure, pare down debts and inject capital into S-Cable.

S-Cable saw its share price jump from six sen to an intraday high of 23.5 sen on Dec 12, 2023, the day of the announcement. It reached 48 sen on Dec 28 before tumbling to 14 sen last Friday, valuing the company at RM55.9 million.

After S-Cable revealed on May 8 that it could not agree with its purported white knight on a plan to revive the company, its share price fell more than 20% the next day. The drop in its share price has surely left many investors badly burnt and S-Cable’s next step will be closely watched.

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