PETALING JAYA: SCOMI GROUP BHD, which faces the risk of being delisted after its request for more time to submit a regularisation plan was rejected, wants to be allowed to make a direct submission to Bursa Malaysia in order to present its unique plan to regularise its financials.

       The loss-making engineering firm said it is working on a “self-rescue” plan, which not only is different from a typical regularisation plan but will also not lead to a severe dilution in the shareholding interests of minorities.

       “This impacts some 20,000 of our shareholders and we urge Bursa Malaysia to allow us the opportunity to present the full plan as what was submitted earlier was limited,” an executive linked with the company told StarBiz.Unlike a white knight asset injection route that PN17 status companies typically undertake, the executive said Scomi is looking to resuscitate its operations via bringing in new projects to generate sufficient revenue, thus profitability.

       “We have been working to review the company and have submitted many bids in the rail and solar sectors. These projects rely on government awards.

       “Unfortunately, there were delays in our progress due to the Covid-19 movement restrictions and a change in government, which hampered our plans to take the company forward” he added.

       Meanwhile, at the Scomi level, there were board changes in March 2021 following the retirement of four directors and the appointment of two new ones. That change also introduced a hiccup in the plans to turn around the company within a specific timeframe.

       While declining to disclose further, he said that the “total bids made are quite large” and it is confident of securing one letter of award for a rail project and a letter of intent for a solar project in the near future.

       Where debt is concerned, he said it was not overwhelming with a total liability of around RM200mil owing to one bank.

       On Monday, Scomi said trading in its shares will be suspended with effect from April 20, following Bursa Securities’ rejection of its request for a further extension of time to submit its regularisation plan.

       It faces the risk of being delisted from the Main Market of Bursa Malaysia on April 22 unless it files an appeal against the delisting by April 18. Scomi fell into PN17 status in Dec 2019, after its shareholders’ equity spread was less than 25% of its issued share capital, and its equity dropped below RM40mil based on its financial results for the quarter ended June 30, 2019.

       Whether there is inconsistency in the rules as to why some companies have been allowed extensions, a capital market specialist explained the general rule is that an extension is given when there is a “material development” towards submission of a regularisation plan.

       “When there is a material development, there are grounds to give an extension,” he said, adding that the onus is on the company to convince the regulator on this.

       He said that the regulator will also look at the balance sheet of the company. If it has a lot of assets or properties, an extension is likely. Otherwise it would be akin to privatising on the cheap.

       But in the case in Scomi, the “self-rescue” plan is different than what is usually presented to Bursa Malaysia, and hence its request for a direct submission.

       Bursa Malaysia in a reply to StarBiz said the exchange “will deliberate any request for an extension of time, or further extension of time (EOT) on a case by case basis.”

       “As part of our consideration, we will take into account all the specific facts and circumstances disclosed by the applicant, including the justifications supporting the EOT application as well as any material development towards the finalisation and submission of the regularisation plan,” it said.

       Scomi said it intends to submit an appeal against the delisting within the appeal timeframe.

       “However, Bursa shall proceed to suspend the trading of the company’s securities on April 20, even though the decision on the company’s appeal is still pending,’’ the company added in its stock exchange filing.

       For the second quarter (2Q) ended Dec 31, 2021, Scomi made a net loss of RM7.18mil, bringing losses for the first half of financial year 2022 to RM14.42mil.

       In the notes accompanying its 2Q results, the company said the pandemic had impacted the group’s prospects.

       However, it said it was actively taking steps to restructure its balance sheet as well as explore avenues to build up its top line by focusing on segments it is familiar with such as energy management solutions, including renewal energy as well as rail maintenance and rehabilitation works.

       Last month, subsidiary Scomi Energy Services Bhd disposed off its oilfield operations to Cahya Mata Sarawak Bhd for RM21mil.

       Shares of Scomi plunged to 0.5 sen, down 80%, yesterday.