KUALA LUMPUR (Jan 4): Scomi Group Bhd's three-way merger proposal fell through after shareholders of its energy unit, Scomi Energy Services Bhd, rejected the offer at a court convened meeting (CCM) held here today.

This is despite the proposal having obtained approval from shareholders of Scomi Group during its extraordinary general meeting (EGM) conducted earlier this same day.

Those who voted against the proposed merger represent 67.34% of non-interested Scomi Energy scheme shareholders, against 32.66% who voted for, according to Scomi Energy's Bursa Malaysia filing.

"As the 3-tier threshold required under Paragraph 2(f) of Schedule 3 of the Rules on Take-overs, Mergers and Compulsory Acquisition have not been met, the Scheme Resolution 1 is not carried," Scomi Energy announced in the filing.

All eyes will now be on Scomi Group's engineering unit, Scomi Engineering Bhd, which is due to hold its own CCM tomorrow, at 2.30pm, for its shareholders to vote on the matter.

Last August, Scomi Group put forth a plan to merge the group with two of its listed subsidiaries — Scomi Energy and Scomi Engineering — via a members' scheme of arrangement involving a share swap and an issuance of warrants, to reduce cost and strengthen its balance sheet. The merger would have resulted in the privatisation of the two subsidiaries.

Scomi Group currently holds a 65.64% equity interest in Scomi Energy, and a 72.33% stake in Scomi Engineering.

Scomi Group has been loss-making for six consecutive quarters now. In its latest financial quarter ended Sept 30, 2017 (2QFY18), the group turned in a net loss of RM25.99 million against a flat revenue of RM173.81 million.