Scomi Group to formulate Monorail Business Revival Plan

KUALA LUMPUR (Dec 23): Scomi Group Bhd has entered into a binding term sheet (BTS) with the receiver and manager (R&M) of Scomi Rail Bhd (SRB) to address the intellectual property (IP) for the group and formulate a composite SCOMI Monorail Business Revival Plan with the R&M.

In a filing with Bursa Malaysia today, the group said the revival plan involved the proposed internal business reorganisation on the monorail business segments, as well as the proposed transfer of the group's monorail business IP from the R&M for SRB for RM36 million.

On the proposed internal business reorganisation, the group said it would be undertaken via the incorporation of three Special Purpose Vehicles, namely  SPV 1 — to be funded by Scomi Group as an intermediate subsidiary of the group to be the holding company for Scomi Transit Projects Sdn Bhd (STPKL), SPV 2 and SPV3.

"SPV 1, through STPKL, shall also acquire all assets and inventories relating to the monorail businesses from See Song Sons Sdn Bhd (SSSSB) at a price to be mutually agreed," it said.

On SPV 2, the company said it would be funded by the group and wholly-owned by SPV 1, to own the accounting and management information system, and all technologies and intellectual properties, relating to the monorail business.

"While SPV 3 to be funded by the group and wholly-owned by SPV 1 to own and manage the debts claimable and all rights arising from such debts in relation to the claims of the group in the monorail litigation claims," it said.

Scomi Group said the corporate exercise was formulated for the revival and rehabilitation of the monorail business for the group.

"Amongst others, the proposed acquisition of STPKL by Scomi Group from the Scomi Engineering Bhd (SEB), the company deconsolidated from the group since Jan 24, 2019, will allow the group to retain, build and enhance the business for the Kuala Lumpur Monorail project, pursuant to the Settlement Agreement and Completion Agreement entered into between STPKL with Prasarana Malaysia Bhd on  April 4 and June 21, 2019, respectively," it said.

In addition, it said the proposed acquisition by the group from the R&M on the IP related to monorail business, which is currently held by the group, will allow it to remain involve in the monorail business in the future.

"The IP is important for the group to secure future local and international monorail projects," it said, adding that the acquisition of inventory assets and parts from SSSSB will further enhance and build up the business compositions for the group's monorail business, which will enhance the chances of success for the contractual claims,” it said.