YESTERDAY’S downgrading of Serba Dinamik Holdings Bhd’s rating by S&P Global Ratings is “very much expected given the current circumstances” and “has probably been priced into” the company’s stock value.
Above all else, head honcho and founder of the global integrated oil & gas (O&G) outfit, Datuk Dr Mohd Abdul Karim Abdullah, opined that the downgrade is temporary.
“Serba is positive to ensure that the both our audit and SIR (special independent review) will be completed on time,” he told FocusM. “Once this is completed, we should be able to restart our refinancing process and address the maturity of our borrowings.”
Abdul Karim also noted that Serba Dinamik has recently bagged 15 new O&G service contracts wins valued at an estimated RM386.3 mil in the areas of operations & maintenance (O&M) and engineering, procurement, construction and commissioning (EPCC).
The group managing director and CEO of Serba Dinamik was commenting on the latest move by S&P to downgrade Serba Dinamik to “CCC” from “B-” previously to reflect the company’s sizable debt maturities of some RM1.7 bil within the next nine months.
The global rating agency further noted that they see Serba Dinamik’s challenges surrounding its special independent review and statutory audit to be a roadblock to the company’s ability to get external sources of funding.
“With less than nine months to its sukuk maturity, Serba Dinamik’s ability to get external sources of capital hinges on a resolution of the special independent review, a timely completion of its statutory audit, and a restoration of market confidence in the company,” S&P pointed in a statement yesterday (Aug 19).
The ratings agency said while the company has not revised its targeted fiscal 2020 filing, any further delays would mean that the company would be hard pressed to meet its articulated deadline.
It sees this as a “key stepping stone” in dispelling uncertainty and restoring confidence among capital providers.
At the close of yesterday’s trading, Serba Dinamik was down 0.5 sen or 1.19% to 41.5 sen with 24.6 million shares traded, thus valuing the company at RM1.55 bil. – Aug 20, 2021
