This article first appeared in The Edge Malaysia Weekly on December 18, 2023 - December 24, 2023

Little-known investment and corporate advisory company Serendib Capital Ltd has emerged as a white knight for financially troubled Sarawak Cable Bhd (S-Cable). According to the company, Serendib will inject RM250 million to revive the fortunes of the cable manufacturer.

The news has certainly sparked interest in the Sarawak-based company. Its share price has moved up substantially since the announcement last week. According to S-Cable, the board received the offer on Dec 5 and accepted the broad terms of the proposal investment by Serendib.

However, no formal agreement has been signed between the parties.

S-Cable was classified as a Practice Note (PN) 17 company since September last year after its external auditor flagged uncertainty on the company as a going concern. In the last one year, S-Cable has embarked on measures to beef up its balance sheet by divesting its non-cable manufacturing businesses.

Among the businesses are a helicopter leasing venture and a mini hydro plant in Medan, Indonesia.

The disposal of the non-core businesses and entry of the white knight with fresh capital is to enable S-Cable to focus entirely on its cable manufacturing business and construction of high-voltage transmission lines. The market is not only in Sarawak but across the Asean region.

On paper, the fortunes of S-Cable are poised to change. According to the company’s statement, Serendib has more than 20 years’ experience and has undertaken several high-profile investments in the region.

The UK-based company sees growth potential for the development of high-voltage grid in the power sector. More important is Serendib’s injection of RM250 million into S-Cable.

Nevertheless, without details, nothing is for certain.

Also, S-Cable has a diverse set of shareholders. Datuk Seri Mahmud Abu Bekir Taib is the single largest shareholder with 21%, followed by Sarawak Energy Bhd (13.13%), Petra Transit Sdn Bhd (9.6%) and HNG Capital (7.9%).

So, how big a stake will Serendib get in return for the RM250 million capital injection?

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