Scomi Engineering shareholders approve merger exercise with Scomi Group
KUALA LUMPUR: Scomi Engineering Bhd (SEB) will proceed with its merger exercise with parent company Scomi Group Bhd even without Scomi Energy Services Bhd (SESB), said SEB CEO Rohaida Ali Badaruddin.
At today’s convened court meeting, 93.52% SEB shareholders voted in favour of the proposed merger after grilling the board members for three hours.
The three-way merger was to see the consolidation of Scomi, SEB and SESB to become a single entity. However, it did not go well as SESB shareholders rejected the merger deal yesterday.
Despite that, Rohaida Ali told reporters that SEB is pleased with the outcome of the meeting, which will see SEB becoming a private entity upon completion of the merger process.
“So for now we will be focusing on going through with the (merger) process and we target to complete the process before the end of February this year,” she added.
Scomi also managed to gain support from its shareholders yesterday, with 99.27% voting in favour of the merger.
Scomi said in a Bursa Malaysia filing that the group will not proceed with the implementation of the proposed merger of SESB.
“The termination of the proposed merger of SESB is not expected to have any material impact on the consolidated earnings per share and net assets per share of Scomi for the financial year ending March 31, 2018.”
However, Scomi noted that SEB will be making an application to the court for the sanction of the SEB’s proposed merger under Section 366 of the Companies Act 2016 in due course.
SEB, a 72.33%-owned subsidiary of Scomi, provides public transport systems and solutions, centred on rail and commercial vehicles. Meanwhile, SESB, in which Scomi owns a 65.65% stake, provides services to the oil and gas as well as coal industries.
To recap, Scomi plans to consolidate SEB and SESB into the group to create one listed entity, a key move to develop new growth areas in renewables and chemicals business.
It involves the acquisition by Scomi and the transfer of all SEB and SESB shares not already owned by Scomi at an offer price of 30 sen for each SEB share and 12.6 sen for each SESB share.
The proposed merger will enable the Scomi group to leverage on the combined financial resources and strengths to compete in and undertake future business contracts, and pursue growth opportunities in both the transport and energy industries that it is familiar with.
Scomi has been in the red for six consecutive quarters. For the second quarter ended Sept 30, 2017, the group’s net loss widened to RM26 million from RM21 million in the previous corresponding quarter.
SEB’s net loss also widened from RM2.63 million to RM31.28 million for the six-month period ended Sept 30, 2017.
At today’s market close, SEB gained 2% to 25.5 sen with 2.74 million shares done, while Scomi slipped 5.56% to close at 17 sen.
Source: The Sun Daily