KUALA LUMPUR (Jan 4): The High Court has sanctioned marine vessel operator EA Technique Bhd's scheme of arrangement with its creditors.
The sanction order was granted by Judicial Commissioner Liza Chan Sow Keng on Wednesday (Jan 4) afternoon.
EA Technique was represented by lawyers Lee Shih, Nathalie Ker and Pang Huey Lynn from Lim Chee Wee Partnership.
A scheme of arrangement is normally used when a company facing financial difficulty has reached an agreement with its creditors to pay back all or part of its debts over an agreed timeline.
On Tuesday, EA Technique said in a filing to Bursa Malaysia that it was still in the midst of formulating a plan to regularise its financial conditions.
“The company has approximately two months to submit its regularisation plan to the relevant regulatory authorities for approval,” the company said in the filing.
On Feb 28 last year, Chan had granted a restraining order to EA Technique after the firm slipped into Practice Note 17 (PN17) status.
The company had triggered the PN17 criteria when its shareholders' equity as at Dec 31, 2021 stood at RM5.96 million, which was less than 50% of its share capital of RM179.755 million, while its auditor had raised concern over its ability to continue as a going concern.
The company was therefore required to submit a regularisation plan to the Securities Commission Malaysia within 12 months.
Last May, external auditor Messrs Ernst & Young PLT (EY) expressed a disclaimer of opinion in its audited financial statements for the financial year ended Dec 31, 2021 (FY2021).
According to EA Technique's bourse filing on May 18, 2022, EY had highlighted the group's net loss of RM150.6 million and the company's net loss of RM161.2 million for FY2021.
It also noted that at end-December 2021, the current liabilities of the group had exceeded its current assets by RM405.3 million, but it only had cash and bank balances of RM6.4 million, while the company's current liabilities had exceeded its current assets by RM416.9 million, but its cash and bank balances only stood at RM5.5 million.
"These events and conditions indicate the existence of material uncertainty that may cast significant doubt on the ability of the group and the company to continue as a going concern," said EY.