Scomi embarks on plan to revive its monorail business

PETALING JAYA: Practice Note 17 company Scomi Group Bhd (SGB) is undertaking a business revival plan for its monorail segment.

Scomi told Bursa Malaysia that it has entered into a binding term sheet (BTS) with Datuk Adam Primus Varghese Abdullah, the receiver and manager (R&M) appointed by Malayan Banking Bhd (Maybank) over the property of Scomi Rail Bhd (SRB), an indirect wholly-owned subsidiary of SGB, which constitutes a composite Scomi Monorail business revival plan.

The revival plan involves a proposed business reorganisation on the monorail business segments for SGB group; and a proposed transfer of SGB’s monorail business intellectual property from the R&M for SRB for RM36 million. The proposed transactions are to be interconditional with each other.

The proposed SGB internal reorganisation will be undertaken via the incorporation of three special purpose vehicles (SPV). Subject to the completion of the proposed SGB internal reorganisation, SGB agrees with R&M for the sale of intellectual property (IP) of SRB by R&M to SPV 2 for RM36 million.

Earlier this year, SRB defaulted on a RM201.91 million loan by Maybank. Taking into consideration the RM38 million settlement by SGB in July and RM27 million from SRB earlier, the net exposure of the amount owed by SRB to Maybank is RM137 million.

“The proposed transaction aims to address the intellectual property for SRB and formulate a composite Scomi Monorail business revival plan with the R&M. It is formulated to revive and rehabilitate the monorail business for SGB Group,” Scomi said.

It said the proposed acquisition by SGB from R&M on the intellectual property related to monorail business, which currently held by SRB, will allow SGB group remain involve in the monorail business in the future. “The intellectual property is important for SGB group to secure future local and international monorail projects.”