Friday 29 Mar 2024
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KUALA LUMPUR (Feb 11): Shares of Scomi Group Bhd (SGB) fell as much as 25% this morning on concerns of it being classified as a PN17 company – a category for cash-strapped entities under Bursa Malaysia’s listing rules.

At 10.27am, the stock pared some of its losses and was down one sen or 16.67% to five sen, with 20.9 million shares exchanging hands, valuing it at RM57.61 million. It is the sixth most active counter on Bursa Malaysia at the time of writing.

The stock was back in the spotlight after The Edge Weekly, citing a source, in its cover story dated Feb 9 wrote that Scomi Engineering Bhd (SEB) has about RM1 billion in claims.

As at Sept 30, 2018, SGB had receivables, deposits and prepayments of RM986.07 million, which is believed largely to belong to SEB, said The Edge Weekly.

In its annual report for FY17, SEB said it had an orderbook of RM1.9 billion and that it had bid for RM3.3 billion worth of jobs.

While its orderbook is indeed huge, The Edge Weekly highlighted that there have been many problems, noting that SEB, Scomi Rail Bhd and Scomi Transit Projects Brazil (Sao Paulo) Sdn Bhd have applied for a judicial management order, whereby the leave of the court will be required to enforce any charge on or security over the property of the affected companies and to commence or continue any legal proceedings against the affected companies.

Strangely, SGB said “none of the affected companies is a major subsidiary”, said The Edge Weekly.

Notably, SGB has been in the reds for 10 quarters. For its cumulative six months ended Sept 30, 2018, the company saw its net loss widened from RM53.53 million, from RM42.17 million.

Additionally, just last month, what seemed like infighting broke out between SGB and its 65% subsidiary Scomi Energy Services Bhd over certain related-party transactions involving loans between the two. The matter is now the subject of an investigation.

Aside from this, there are other issues as well, such as SEB and its joint-venture partner being terminated from an operations and maintenance contract at the Mumbai Monorail project in India.

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