KUALA LUMPUR (Aug 23): The Kuala Lumpur High Court has appointed an interim liquidator (IL) to take control of Serba Dinamik Holdings Bhd and three of its subsidiaries after the troubled oil and gas company breached a Consent Order that requires it to start repaying a syndicated loan owed to six banks.
The IL will have power to control the companies' affairs until the full appointment of a liquidator to kick-start a winding-up process. The hearing of a winding-up petition against Serba Dinamik is scheduled for Jan 10 next year, with a decision possibly delivered on the same day.
In his ruling on Tuesday (Aug 23), High Court Commercial division judge Nadzarin Wok Nordin said the primary interests in winding-up proceedings are the interests of creditors.
Nadzarin found no dispute in the Consent Order entered into by the parties on June 8, which "expressly states" that in the event of a default, Serba Dinamik and its related companies "shall not object or oppose the appointment of an IL".
"It is also not in dispute that the scheme of arrangement has provided for the first tranche of payment to be made on or before Aug 12, 2022, and that the terms of the scheme were inter-conditional, and the scheme has now been breached by the failure to make payment before the aforementioned date," Nadzarin said.
"It is my decision that the parties are bound by the terms in the Consent Order and that the Consent Order must be given effect thereto," he added.
These six banks — the petitioners that had requested for the appointment of an IL — are Standard Chartered Saadiq Bhd, HSBC Amanah Malaysia Bhd, AmBank Islamic Bhd, MIDF Amanah Investment Bank Bhd, United Overseas Bank (Malaysia) Bhd and Bank Islam Malaysia Bhd. They were represented by Shearn Delamore & Co's Datin Jeyanthini Kannaperan.
During the virtual proceedings on Tuesday, Nadzarin said his decision also took into consideration of "all the surrounding circumstances and the rather chequered history of Serba Dinamik companies".
"Bearing in mind in particular the extremely huge debts incurred by the Serba Dinamik companies whereby [owing] the international sukuk holders of about US$500 million (RM2.24 billion), although they (sukuk holders) are not supporting the IL application, they are neither objecting to that," he said.
"I have also taken into account that [amount owed to] syndicated lenders of about RM1.7 billion, bilateral lenders of about RM68 million and Hong Leong [Islamic Bhd] being owed RM240 million.
"These are, in terms of number and value, very significant and must be given due weight.
"The IL is an officer of the court and subject to the court's control. Any interested party may apply to the court in the event a conflict situation arises," he added.
Serba Dinamik and its three subsidiaries — Serba Dinamik International Ltd, Serba Dinamik Group Bhd and Serba Dinamik Sdn Bhd — were represented by Mak Lin Kum.
Earlier in the proceedings, Jeyanthini submitted that under the Consent Order, the syndicated financiers were supposed to receive repayment of the first tranche of the scheme debt equivalent to 7.5% of principal outstanding on or before Aug 12.
"The syndicated financiers or the petitioners do not agree to any extension [beyond] Aug 12. The ship has sailed. Aug 12 came and went without payment," she said.
Also attending the proceedings on Tuesday was Benjamin Dawson, lawyer of bilateral lenders HSBC Amanah and HSBC Bank Malaysia, who submitted that the interest of creditors is better served by placing management of Serba Dinamik in the hands of an IL.
"The issue [that] must be kept in the forefront of my lord's mind is that parties are bound by the terms of the Consent Order, and the court, as well as all parties before the court, must give effect to the terms of the Consent Order.
"Simply put, that means in the event of failure of Serba Dinamik to comply with the payment terms on Aug 12, they will not object to the appointment of the IL," he said.