KUALA LUMPUR (May 16): Sarawak Cable Bhd (KL:SCABLE) on Thursday said that the High Court has allowed the winding-up petition by OCBC Bank (Malaysia) Bhd on its subsidiaries Universal Cable (M) Bhd and Leader Cable Industry Bhd.
The order was granted by the High Court on Wednesday (May 15), the loss-making cable manufacturer said in a bourse filing.
The court has also appointed Eddie Goh Hua Yang and Khoo Siew Kiat from Messrs Deloitte Restructuring Services PLT as joint liquidators for both Universal Cable and Leader Cable.
In the meantime, Sarawak Cable said it is seeking its solicitors' advice on the next course of action.
In a separate filing with Bursa Malaysia, Sarawak Cable said it has triggered Paragraph 2.1(c) of PN17, following the winding up order against the two subsidiaries as they collectively account for at least 50% of the total assets of the group.
OCBC Bank filed the winding-up petition on Oct 9, 2023, claiming Sarawak Cable’s failure to get its creditors’ buy-in for a scheme of arrangement involving Universal Cable and Leader Cable on Sept 26 last year.
Leader Cable and Universal Cable were indebted to OCBC for a sum of RM46.158 million and RM28.352 million as at Sept 15, 2022, with interest that continues to accrue with the petitioner, according to Sarawak Cable’s past filing.
It was previously noted that the winding-up of Leader Cable and Universal Cable will negatively impact the group, as both are major subsidiaries of Sarawak Cable, with total investments of RM205.81 million.
On Sept 26, 2022, Universal Cable and Leader Cable filed an originating summons in the Kuching High Court for leave to convene a court-convened meeting (CCM) with its creditors to consider their proposed scheme of arrangement and compromise between the respondents and its creditors.
Its subsidiaries also filed for a restraining order to halt further proceedings in any legal action or proceedings against the respondents.
OCBC did not agree with the scheme of arrangement and voted against the CCM, which was convened on Sept 26, 2023. Creditors, including the petitioner, rejected two of the 10 debt settlement schemes.
Besides OCBC, other creditors involved in Sarawak Cable's scheme of arrangement include Hong Leong Bank Bhd (KL:HLBANK), Bank Muamalat Malaysia Bhd, AmBank (M) Bhd, CIMB Bank Bhd (KL:CIMB), Malayan Banking Bhd (KL:MAYBANK), Bangkok Bank Bhd, and Universal Trustee (Malaysia) Bhd.
Sarawak Cable was in the spotlight last week after announcing that its so-called “resuscitation exercise” with UK-based Serendib Capital Ltd fell through. The news also saw its shares fall to its lowest in five months.
However, Serendib Capital Ltd said in a statement that the agreement to rescue Sarawak Cable remains in force and cannot be terminated unilaterally.
Shares in Sarawak Cable closed half a sen or 3.7% higher at 14 sen, giving the group a market capitalisation RM56 million. The stock has declined 67.07% year to date.