KUALA LUMPUR (July 7): Two of Serba Dinamik Holdings Bhd's subsidiaries defaulted on three facilities worth RM435.4 million last year.

In a filing with Bursa Malaysia on Friday (July 7), the PN17 company said its wholly-owned unit Serba Dinamik Group Bhd (SDGB) had defaulted on payment amounting to RM400.77 million provided by MBSB Bank Bhd and Bank Kerjasama Rakyat Malaysia Bhd under the Islamic Club Financing Arrangement.

The amount defaulted as on Aug 11, 2022 was due to constrained cash flows to settle outstanding payments to MBSB, the group said.

Following the non-payment, MBSB as the custodian bank had initiated legal proceedings against SDGB to exercise its rights as secured creditor per the financing agreements' terms.

The same subsidiary (SDGB) also defaulted on another facility amounting to RM34.4 million provided by Affin Islamic Bank Bhd under the Tawarruq Term Financing-i facility.

The company said the winding up of SDGB triggered the event of default as  the subsidiary could not pay all outstanding amounts due to Affin Bank at the time of default.

Another subsidiary, Serba Dinamik Sdn Bhd (SDSB), defaulted on its payment of RM228,568 provided by Small Medium Enterprise Development Bank Malaysia Bhd (SME Bank) under the Bai’Inah Facility.

However, the facility was fully settled on June 1 following SME Bank exercising its rights to uplift a fixed deposit for the repayment of the facility granted to SDSB.

The amount defaulted as on Dec 22, 2022 was also inclusive of compensation (Ta’widh) for late payment charges equivalent to the actual loss at the rate of 1% per annum on the overdue amount, the group said.

Constrained cash flow to settle outstanding payment to SME Bank was the reason for the non payment.

On Jan 10, Victor Saw Seng Kee of PricewaterhouseCoopers Advisory Services Sdn Bhd was appointed as interim liquidator of Serba Dinamik, SDGB, SDSB and Serba Dinamik International Ltd (SDIL).

Notably, the High Court here on Friday (July 7) approved the liquidator’s application for authorisation to continue the operations of Serba Dinamik and three liquidating companies for 365 days starting from July 9, 2023 until July 8, 2024.

This is necessary for the beneficial winding-up of the companies.

Serba Dinamik fell into Practice Note 17 status on Jan 6 after its external auditor expressed a disclaimer of opinion on the group's audited financial statements for the 18-month financial period ending June 30, 2021.

Last month, it was reported that Serba Dinamik said in a Bursa Malaysia announcement that it was finalising its financial report for the third quarter ended March 31, 2023.