PETALING JAYA: Scomi Group Bhd’s sub-subsidiary Urban Transit Private Limited (UTPL) and subsidiary Scomi Engineering Bhd (SEB) have each received a notice of demand from India’s Axis Bank Limited for 624.63 million rupee (RM36.15 million) due to failure by UTPL (as borrower) and SEB (as guarantor) to pay under the bank facilities granted to UTPL.
“UTPL and SEB are still in the process of negotiating with Axis Bank. Currently, there are no business, financial and operational impact of the default on Scomi,“ the group said in a stock exchange filing.
This will give rise to an event of default by virtue of the cross-default provision under the financing documents in respect of a leasing facility amounting to RM1.29 million and an overdraft and foreign exchange contract facility (zero outstanding) granted to certain subsidiaries of Scomi.
Axis Bank has the right to proceed with legal proceedings against UTPL as the borrower and SEB as the guarantor. Scomi has no liability in respect of obligations incurred under the bank facilities as they are neither a borrower nor a security party.
“By virtue of the cross default provision of the financing documents, the respective financiers will have the right to declare the financing facilities therein be cancelled and will become due and payable immediately. The financiers may enforce on the securities created under the respective financing documents, if any.”
Scomi said UTPL and SEB are not major subsidiaries of the company.
Source: The Sun Daily