SERBA Dinamik Holdings Bhd has urged investors to accord benefit of doubt to the company with regard to its Practice Note No 17 (PN17) status given it is not the only listed entity on Bursa Malaysia to be classified as a PN17 issuer.
Pointing to AirAsia Group Bhd which has also slipped into similar status recently, the company’s group managing director/CEO Datuk Dr Mohd Abdul Karim Abdullah broke his silence by reasoning that a company can be classified as a PN17 entity due to several reasons, hence such status does not necessary mean the end of the road for them to bounce back.
“In Serba’s case, the classification is due to its inability to explain a default payment,” he told FocusM. “By analysis, a company in an industry which entails high capex and opex is exposed to default payment of their bond payment. A close example is MEX 2 Sdn Bhd which has defaulted its coupon payment on RM1.3 bil Islamic bond.”
As of today, there are a total of 24 companies under PN17 and GN3 which represent 2.65% of the total number of 905 companies listed on the Main and ACE Markets of Bursa Malaysia.
On Jan 6, the global integrated oil & gas (O&G) service provider has triggered the PN17 criteria pursuant to Paragraph 2.1(d) of PN17 of the Main Market Listing Requirements (MMLR) of Bursa Malaysia Securities Bhd.
The classification came about after Serba Dinamik’s external auditor expressed a disclaimer of opinion on its audited financial statements for the 18-month financial period ended June 30, 2021.
Serba Dinamik is due to stage its fifth annual general meeting (AGM) virtually on Jan 31 (Monday).
Abdul Karim expressed optimism that Serba Dinamik is able to achieve a turnaround as per Bursa Malaysia’s requirement as the company has a solid existing business model.
“This can be done although the timeline may need to be extended due to Bursa Malaysia’s strict requirement,” he rationalised. “At the end of the day, Serba is very much expected to maintain its O&G business operations as its mainstay at the moment.”
Abdul Karim added that Serba Dinamik is expected to announce its regularisation plan by appointment of an interim advisor after the company’s AGM.
As per Bursa Malaysia’s guidance, PN17 companies should submit their regularisation plans to the market regulator within 12 months from the notice date.
Once a particular PN17 company gets an approval from Bursa Malaysia, it should complete the implementation of its regularisation plan within six months from the approval date in addition to securing a net profit for two consecutive quarters upon completion of the plan.
Serba Dinamik was last transacted at 35 sen at the close of the mid-day trading on Oct 22 prior to the trading suspension of its shares/warrants, hence giving the company a market capitalisation of RM1.3 bil. – Jan 26, 2022
