SCIB shareholders approve share capital reduction; CEO Rosland ceases to be substantial shareholder
KUALA LUMPUR (June 30): Sarawak Consolidated Industries Bhd’s (SCIB) shareholders today approved the group’s proposal to cancel RM40 million worth of its issued share capital.
The credit arising from the share capital reduction would be used to eliminate the accumulated losses of the group, SCIB said in a statement after shareholders approved the proposal at an extraordinary general meeting.
“The reason for the proposed capital reduction is to offset the losses that the company has accumulated from 2006 to 2018, as a result of the net loss incurred from operating business,” said group managing director and CEO Rosland Othman.
“This will enhance the company's financial profile with our bankers, customers, suppliers, investors and other stakeholders, as the elimination of accumulated loss would reflect the current value of underlying assets and financial position,” he said.
Rosland said SCIB’s target of achieving the market capitalization of RM2 billion by year-end still applies, despite the impact of Covid-19 to the domestic economy.
“However, our operational progress has been restricted due to the reimposition of the movement control order by the government.
“Hence, we have been constantly engaging with our clients, suppliers, and subcontractors for site progress planning and rescheduling to minimise disruptions to operations and manage the costs,” he added.
Rosland also highlighted that the group is proactively focused on meeting its client's expectations and cost rationalization, while also looking to secure potential projects to cushion the impact from the stretched schedule of an existing project.
Meanwhile, Rosland stressed that SCIB and Serba Dinamik are two separate companies and business segments that share a common shareholder, and it has independent and separate management.
“We have minimal exposure to Serba Dinamik’s projects, as the current recurrent related party transactions in Abu Dhabi and piling works has not commenced and we face no financial risk on said projects.
“The existing management in SCIB has also proven our capability in winning and managing new projects for the company,” he said.
Serba Dinamik’s group managing director Datuk Dr Mohd Abdul Karim Abdullah is the largest shareholder of SCIB, holding a 36.8% stake in the company.
Separately, in a filing to Bursa Malaysia, SCIB notified that Rosland has ceased to be a substantial shareholder of the group.
This comes after he disposed of a total of 3.16 million SCIB shares, reducing his shareholding to 4.69% or 22.99 million shares.
SCIB shares closed 5.5 sen or 11.96% higher at 52 sen today, giving the group a market capitalisation of RM249.92 million. Since the beginning of the year, the stock has fallen by 62.41%.