KUALA LUMPUR (June 24): Marine transportation and offshore storage company EA Technique (M) Bhd (KL:EATECH) received shareholders’ approval for its proposed regularisation plan at the company’s extraordinary general meeting on Monday. 

This marks a pivotal step in the company’s efforts to regularise its financial status after being classified as a Practise Note 17 (PN17) company for more than two years.

The regularisation plan involves the issuance of up to 795.75 million new shares and the exemption of businessman Datuk Wira Mubarak Hussain Akhtar Husin and Voultier Sdn Bhd (VSB) from the obligation to make a mandatory takeover offer. The offer will raise RM79.6 million, representing approximately 60% of EA Technique’s enlarged share capital.

That said, VSB will emerge as the largest shareholder with a 51% stake in EA Technique. VSB is owned 70% by Mubarak Hussain and 30% by Datuk Lai Keng Onn, who is managing director of Kinenergy Advancement Bhd, according to the company’s statement. 

According to Mubarak Hussain, the proceeds from the shares issuance are earmarked for the company’s financial obligations: RM31 million for scheme creditors, RM26 million for Sindora Bhd, and RM19.7 million for general working capital over the next 24 months. 

Johor Corp’s stake is held through Sindora Bhd, a unit of its wholly owned subsidiary Kulim Bhd. Sindora’s stake will be diluted to 20.02% from 50.05%, following the exercise.

“EATech (EA Technique) expects to recognise a one-off net income of approximately RM127.4 million from the debt waivers, significantly improving financial health with NTA (net tangible assets) increasing from RM57.4 million to RM261.6 million.  With Petronas (Petroliam Nasional Bhd) planning significant investments in exploration, development and production, EATech is well-positioned to benefit from increased demand for its services,” Mubarak Hussain added. 

Meanwhile, EA Technique’s chief executive officer Nasrul Asni Muhammad Dain said following the successful completion of the proposed regularisation plan, the company’s immediate strategic priority is to lift itself from the PN17 status. 

“Our turnaround plan was a pivotal milestone in demonstrating our sustained profitability over seven consecutive quarters, from the third quarter of 2022 to the first quarter of 2024,” he said. 

This is the second regularisation plan, as the first was withdrawn after a potential white knight, businessman Tan Sri Abdul Rashid Abdul Manaf, pulled out after the plan was unveiled. 

Nasrul Asni was quoted as saying in The Edge Malaysia weekly article titled “EA Technique ready to exit PN17 status”, published for the week of April 1-7, 2024, that the withdrawal was due to personal reasons.

EA Technique slipped into PN17 status in February 2022, after its shareholders’ equity of RM5.96 million as at end-December 2021 was less than 50% of its share capital of RM179.76 million, prompting the company to submit a regularisation plan. 

As at 2.40pm on Monday, shares of EA Technique rose 1.43% or half a sen to 33.5 sen, giving it a market capitalisation of RM188.33 million.