KUALA LUMPUR (May 10): Sarawak Cable Bhd (KL:SCABLE) says it has identified "a strong alternative party" who is interested in spearheading a resuscitation plan for the group, after its plan to regularise its financials with the help of UK-based Serendib Capital Ltd fell through.
The loss-making cables maker further said that it had been unable to reach an agreement with Serendib Capital on their working relationship, given a delay in proposing and implementing any debt settlement with the company's creditors within the agreed-upon period under the memorandum of agreement (MOA) inked in December last year.
"The company is of the view that the delay is against the best interest of the company, its creditors and shareholders. In this regard, the company had identified a strong alternative party who has expressed an interest in spearheading a resuscitation plan," it said in a bourse filing.
It further said that the termination of the MOA with Serendib would not impact the group's regularisation plan to exit its Practice Note 17 (PN17) status.
Following termination of the MOA, Sarawak Cable's share price fell over four sen to touch a five-month low of 11.5 sen on Thursday, before recovering to 16 sen. It dipped two sen on Friday to close at 14 sen, giving Sarawak Cable a market capitalisation of RM55.86 million after some 31.24 million shares changed hands. Year to date, the counter has lost 27 sen, or nearly 66%.
Sarawak Cable, which has been loss-making since 2017, fell into PN17 status in September 2022 after its external auditor raised doubts about its ability to continue as a going concern after certain financial institutions suspended its credit facilities.
The deadline to submit its regularisation plan has been extended several times. The latest deadline is Sept 30 this year.
For the nine months ended Feb 29, 2024, Sarawak Cable widened its net loss to RM69.58 million from RM26.44 million a year earlier, as revenue dropped 39.92% to RM273.94 million from RM455.94 million.
The group’s largest shareholder is chairman Datuk Seri Mahmud Abu Bekir Taib, second child of the late Tun Abdul Taib Mahmud. He currently holds an 18.63% stake, while Sarawak Energy has a 13.13% stake.