LOSS-making energy services firm Serba Dinamik wants to delay and stop a winding-up order it said will affect high value deals of “national and strategic interests”, a director said in a court affidavit.

The Kuala Lumpur High Court granted the winding-up order against the company and three subsidiaries over a RM5 billion debt reported to be the largest insolvency case in the courts.

Serba Dinamik director Kadier Sahib said the order affected the entire Serba Dinamik group and not just Serba Dinamik Holding Bhd, Serba Dinamik Sdn Bhd, Serba Dinamik International Ltd, and Serba Dinamik Group Bhd.

“The path of liquidation is destructive of the very value that is required to be generated to repay the debts owing to creditors,” Kadier said in his affidavits to support an application for a stay of the winding-up order.

The companies are seeking a stay pending their application to the Court of Appeal against the winding-up order.

Justice Ahmad Murad Abdul Aziz will be deliver his decision on an ad interim stay application on February 10. He will then hear the companies’ motion for a permanent stay of his winding-up order on March 6.

In his affidavit in support of the motion for a stay, Kadier listed several projects owned by Serba Dinamik and its subsidiaries that will take a major hit if the order to win up is not stayed.

Among others, he listed Bintulu Integrated Energy Hub (BIEH), Pengerang Eco-Industrial Park (PEIP), Bintulu Oil and Gas Centre and University Malaysia of Computer Science and Engineering (Unimy) as projects with national interests.

Apart from that, he said international projects like the Innovation Hub and Data Centre in the UAE and the chlor-alkali plants in Uzbekistan and Tanzania will be put off or cancelled all together due to the winding-up order.

“Once such projects are considered abandoned, there are significant upfront costs to restart in terms of new approvals, funding and supply chain planning,” he said.

Affected projects

Kadier said BIEH was important as it provided support in maintenance and repair, engineering procurement construction and commissioning, education and training, production of green technology products to Petronas LNG Complex, Asean Bintulu Fertilizer Sdn Bhd, Shell MDS (Malaysia) Sdn Bhd, Sarawak Shell Bintulu Plant (Bintulu Crude Oil Terminal), Kirana Palm Oil Refinery Sdn Bhd, Tg Kidurong Power Station (Sarawak Energy Berhad/Sarawak Electricity Supply Company/Sesco), and Murphy Bintulu Onshore Receiving Facility.

As for Pengerang Eco-Industrial Park (PEIP), Kadier said the project was 60% completed and Malaysia’s first one-stop centre to provide services to the refinery and petrochemical integrated development joint venture project between Petronas and Saudi Arabian Oil Company, which had made a massive combined investment of approximately US$29 (RM123.4) billion.

“In the absence of PEIP, Rapid will be hampered as they will be compelled to procure such services from overseas. There is currently no support facility for the Rapid project as comprehensive as PEIP,” he added.

He added that PEIP also included a T-Vet City, which is a technical and vocational education and training campus.

“Serba Dinamik has also a future project in Rapid which is Pengerang International Commercial Centre consisting of service apartments, offices, hotels and shopping malls.

“If the stay is not granted, this whole project will be in jeopardy and we will lose its ability to attract foreign partners, potential buyers and/or investors.” he said.

He said these projects saved the nation money as otherwise these services would have to be procured from other countries, apart from stopping outflow of the Malaysian currency.

These projects will also ensure capacity and experience building of local manpower, talents and expertise, added Kadier.

On the Bintulu Oil and Gas Centre project, Kadier said this was planned to create an integrated development comprising industrial, commercial, recreation, hospitality and tourism facilities with a view to promote Bintulu as a “Global Gas City”.

He added that a joint venture company known as Bintulu Oil and Gas City Sdn Bhd has been set up between Serba Dinamik Group Bhd, Bintulu Development Authority and Sarawak Consolidated Industries Bhd.

“If the stay is not granted, this whole project will be in jeopardy and we will lose its ability to attract foreign partners, potential buyers and/or investors resulting in an adverse effect on the company to generate future revenue.”

Kadier said Serba Dinamik was also involved in the education sector through Unimy where there are currently three prospective bidders for the takeover of this institute.

“But without a stay, it will adversely affect the potential takeover of Unimy by these interested parties in terms of the value of the bid and potential delay of the takeover.”

Enhance value

He said the Serba Dinamik group would suffer irreparable damage as a result of the execution of the winding-up order as it would affect its existing contracts with third and counter parties.

It would also lose its ability to tender contracts, as such exposing them with claims by third and counter parties.

On the employee front, Kadier said there are more than 500 employees who will lose their livelihood with the winding-up order.

“The winding-up order will also adversely affect our ability to claim against our debtors amounting to around RM1.6 billion, and to conduct its business including projects overseas with its joint venture partners,” he said.

He added that the purpose of the stay was not to defeat the claims and interests of the petitioners and creditors or that of the Serba Dinamik Group.

“The real purpose of the stay is in fact aimed at preserving and enhancing the value of the businesses and assets of the Serba Dinamik Group which will ultimately benefit the creditors,” he added.

On January 10, Ahmad allowed applications by six financial institutions and some of Serba Dinamik’s creditors to wind up the four companies over the non-payment of loans. – February 7, 2023.