Scomi Group applies for judicial management

KUALA LUMPUR: Three subsidiaries of Scomi Group Bhd have applied for judicial management from the Shah Alam High Court as part of its financial restructuring.

The three companies were Scomi Engineering Bhd, Scomi Rail Bhd and Scomi Transit Project Brazil (Sao Paulo) Sdn Bhd and the restructuring exercise was to place the company on a strong footing.

“Judicial management is a corporate rescue mechanism pursuant to Companies Act 2016 that provides a rehabilitation framework to give companies which are in financial distress an opportunity to be rehabilitated.

“It will temporarily shield the companies from legal proceedings by third parties while the companies are undergoing such rehabilitative measures,” it added.

Scomi group recorded a net loss of RM27.91 million in its second quarter ended Sept 30, 2018 and for its year to date, it recorded a net loss of RM53.52 million.

“The application for judicial management by the three companies have been made to serve the interest of its stakeholders with the objective of reviving the companies.

“The group believes this move will allow for rehabilitative steps to be considered with the aim of enhancing and strengthening the ability of the said companies under judicial management to complete all its current projects and deliver on its contractual commitments to its clients,” it added. - Bernama