KUALA LUMPUR (Sept 13): Offshore fabricator and shipbuilder TH Heavy Engineering Bhd (THHE) is undertaking a voluntary winding-up, a year after it was delisted from Bursa Malaysia.
The company resolved to undertake voluntary winding-up as it is unable to continue its operations due to liabilities, it said in a winding-up notice dated Sept 13.
The winding-up notice also stated that a meeting of creditors is scheduled for Oct 4 at 3pm.
THHE is controlled by the Ministry of Finance-owned (MoF) unit Urusharta Jamaah Sdn Bhd, which holds a 64.45% stake in the company prior to its delisting on Sept 5, 2022.
As at March 23, 2022, other shareholders include Mohamed Faroz Mohamed Jakel and siblings Luqman and Mohamed Nizam who collectively held 2.95%, according to THHE’s last annual report.
As at end-June 2022, THHE had capital deficiency of RM210.87 million, as it had RM393.14 million in total liabilities, against RM182.27 million in total assets.
Among its key assets include a yard in Pulau Indah, where it is able to fabricate offshore structures and undertake medium scale shipbuilding – with fabrication yard capacity of 10,000 tonnes per annum and load out capacity of 2,500 tonnes.
The winding-up marks the end of the company, which was previously known as Ramunia Holdings Bhd and one of the oil and gas (O&G) industry darlings during the boom in the late 2000s.
The company was part of Lembaga Tabung Haji, which emerged as a substantial shareholder in 2007 before becoming a controlling shareholder in 2012.
However, the O&G industry downturn pulled it into the red in 2014, and it was not been able to recover since. Subsequent pivots to building vessels such as the offshore patrol vessels (OSVs) for the Ministry of Home Affairs also failed to revive its financial position.
TH Heavy was delisted from Bursa Malaysia in September 2022, after failing to come up with a restructuring exercise despite being given eight extensions by the exchange since first entering Practice Note 17 status in April 2018.
The decision to wind up came after THHE filed an ex-parte originating summons in July to call for a creditors’ meeting to propose a scheme of arrangement for the company.
Global Mariner Offshore Services, Blackstone Technology Sdn Bhd and Dynac Sdn Bhd have reportedly filed applications to intervene in THHE’s ex-parte application.
THHE had a joint venture partnership with Global Mariner, but a legal dispute arose between the two companies. The High Court ordered THHE to pay Global Mariner approximately RM288.72 million in damages.
This judgment was a result of THHE's failure to honour a shareholders agreement, specifically the transfer of its 80% stake in Floatech (L) Ltd to Global Mariner, following THHE's default on its loans.
According to the winding-up notice, the board of directors of THHE passed a resolution to wind up the company last Friday (Sept 8). Meanwhile, Andrew Heng and Ashvin Mahendran of Baker Tilly Insolvency PLT have been appointed as the interim liquidators, the notice said.
This is to consider the company’s financial position, the list of creditors and the estimated amounts they owe, and to confirm the appointment of Heng and Ashvin as joint and several liquidators for the purpose of winding up the business and distributing the company's assets.
A scheme of arrangement is a legal process that allows a company to negotiate with its creditors and come up with a mutually agreed-upon arrangement to address its financial difficulties.
THHE was slated to deliver its first offshore patrol vessel (OPV) to the Malaysian Maritime Enforcement Agency (MMEA) in July this year after several delays, but no announcement has been made. The delivery has reportedly been moved to October.
To recap, the company secured the contract to deliver three OPVs to the MMEA for RM738.9 million in January 2017. The first vessel was supposed to be delivered to MMEA in February 2020, the second in May and the last one in August that same year.