SCOMI Energy Services Bhd (SESB) said that its shareholders have approved the disposal of its oilfield services business division for RM21 million.

The company told the local bourse yesterday that the approved disposal consists of 100% equity interest in Scomi Oilfield Ltd together with nine of its subsidiaries and 48% equity interest in Scomi KMC Sdn Bhd (SKSB) to Cahya Mata Oiltools Sdn Bhd; and the disposal by Scomi Oiltools Sdn Bhd, a subsidiary of SESB, of its equity interest in SKSB, Scomi Oiltools Gulf WLL, its property in Dataran Prima, Petaling Jaya, Selangor, and its inventories and equipment to Oiltools International Sdn Bhd (Approved Disposal).

The Approved Disposal was approved by SESB’s shareholders at an extraordinary general meeting held yesterday, Aug 8, 2022.

“SESB has been classified as a PN17 company by Bursa Malaysia Securities Bhd since Oct 31, 2019, and the company is required to submit a regularisation plan to uplift its PN17 status by Nov 30, 2022,” SESB CEO Amirul Baharom said in the exchange filing.

“This disposal of the oilfield services business is part of the rehabilitation of SESB in line with developing its regularisation plan.”

SESB has undertaken several initiatives towards the rehabilitation of the company including judicial management, which is a corporate recovery mechanism accorded to companies in financial distress since triggering the PN17 status. 

It further said in view of the complexity of the financial liabilities, SESB decided to review the option of disposing of its assets in the marine and oil and gas industry to allow for a revamp of its business.  

In November last year, SESB completed the disposal of its marine business, PT Rig Tenders Indonesia, as a precursor to its PN17 regularisation plan and on March 17, 2022, announced the proposed disposal of its oilfield services business.

“Rather than face the risk of a groupwide appointment of receivers and managers by its lenders, which would be vastly detrimental to the company, we made the decision to monetise the potential of our marine and oilfield services businesses,” Amirul explained further.

According to him, the Approved Disposal will result in a new lean group structure without the contingent liabilities and risks of liquidation and de-listing, which will allow the company to explore opportunities to undertake a comprehensive regularisation plan.

“Whichever path is chosen, we will ensure that the plan is viable, sustainable and has growth prospects warranting the continued listing of SESB.

“However, it is premature to speculate on the specifics and we will announce details as the plan is finalised,” re-iterated the CEO.

The Approved Disposal is anticipated to be completed in August 2022. — TMR / pic source: scomigroup.com.my