KUALA LUMPUR: United Kingdom- based Serendib Capital Ltd has emerged as a white knight for Practice Note 17 company Sarawak Cable Bhd (SCB), complete with a RM250 million war chest.
The largest power cable manufacturer in Malaysia's stock was up 8 per cent to close at 6.5 sen at midday break.
In a filing with Bursa Malaysia today, SCB said the monies will be used to restructure and pay down outstanding creditors, as well as for an injection of capital into the company to cater to the growing customer demand for infrastructure grid development and high voltage cables.
Serendib Capital is an experienced UK based investor with over two decades of experience in advisory and financial asset restructuring in South Asia.
Serendib Capital sees the growing emphasis on national development of Malaysia's electrical infrastructure as an attractive proposition for SCB. It expects increased electrification of transport, ASEAN grid connectivity and the mushrooming of power hungry datacentres and the demand for electric vehicles as key drivers for growth in the near future.
"We see this partnership as an extremely positive development in the path to restructuring our financial commitments at SCB."We look forward to leveraging the financial firepower and turnaround expertise of Serendib Capital so that we can focus on aggressively delivering on our RM900 million orderbook" said SCB group chief executive officer Russell Boyd.
"We are delighted to commit to partnering and investing with SCB, the largest power cable manufacturer in Malaysia, and leading manufacturer regionally. The quality of SCB's customer base and manufacturing capabilities are second to none. We eagerly anticipate cleaning up whatever lingering legacy issues still remain and to restoring and surpass SCB as compared to its former glories, as we build this business into a regional powerhouse" SCB non-independent executive director and advisor to Serendib Capital Takeo Hirata said in the statement
In October, SCB's external auditor Baker Tilly Monteiro PLT issued a disclaimer opinion on the group's financial statements for the year ended May 31, 2023 (FY2023).
It said the company's FY2023 financial position and the group's PN17 status indicate that material uncertainties exist that may cast significant doubt on the company's ability to continue as going concern.