KUALA LUMPUR (Feb 5): Formula Mutakhir Sdn Bhd (FMSB) has filed a petition to wind up Ahmad Zaki Sdn Bhd (AZSB), a wholly-owned subsidiary of engineering and construction group Ahmad Zaki Resources Bhd (AZRB), for allegedly failing to settle an outstanding amount of RM118,009.13.

In a filing to Bursa Malaysia, AZRB disclosed that FMSB submitted the winding-up petition to the High Court of Malaya on Jan 18, which was served upon AZSB on Jan 30.

However, AZRB clarified that AZSB is not a major subsidiary of the company, and it does not anticipate any financial or operational impact due to the petition.

"Save for the legal fees and disbursements involved, the AZRB Group does not expect to incur losses arising from the petition," AZRB said.

The group further explained that ongoing negotiations were in progress between the group and FMSB to resolve the matter amicably at the time of the petition being served. AZRB expressed confidence in resolving the issue shortly.

Additionally, AZRB considered the outstanding sum claimed by FMSB through the winding-up proceeding as not a material debt.

"AZRB believed that making any announcement regarding the aforementioned petition would be premature. We remain in discussions with the petitioner to resolve the matter amicably," AZRB added.

It is noteworthy that AZRB is also facing another winding-up petition by Sukiada Engineering Sdn Bhd (SESB) on Jan 26, for allegedly failing to settle an outstanding amount of RM168,115.25, excluding interest as of June 30, 2023.

AZRB has been reporting losses for four consecutive financial years from the 12 months ended June 2020 (FY2020) until FY2023.

In 1QFY2024, AZRB recorded losses of RM20 million, a narrower figure compared to the RM27.9 million reported in 1QFY2023. Quarterly revenue increased by 40.77% to RM105.3 million, up from RM74.8 million.

As of end-September 2023, AZRB had cash reserves of RM268.37 million and borrowings of RM3.04 billion. The group also held negative equity reserves of RM139.67 million.

Shares in AZRB closed half a sen or 2.56% higher at 20 sen, giving the group a market capitalisation of RM131.55 million.