Oil and gas company Serba Dinamik Holdings Bhd subsidiaries, Serba Dinamik Group Bhd (SDGB) and Serba Dinamik Sdn Bhd (SDSB), defaulted on three financing facilities worth RM435.4 million.

According to a report from The Edge, the company cited constrained cash flows in a filing with Bursa Malaysia as a reason for SDGB defaulting on payment totalling RM400.77 million from MBSB Bank Bhd and Bank Kerjasama Rakyat Malaysia Bhd under the Islamic Club Financing Arrangement as on August 11 last year.

This led to MBSB initiating legal proceedings against SDGB due to its rights as a secured creditor in line with the financing agreements’ terms.

SDGB also reportedly defaulted on another financing facility totalling RM34.4 million from Affin Islamic Bank Bhd’s Tawarruq Term Financing-i facility.

The liquidation of SDGB caused the default as the company became unable to pay its outstanding amounts, it was reported.

As for SDSB, it reportedly defaulted on a payment of RM228,568 from Small Medium Enterprise Development Bank Malaysia Bhd’s (SME Bank) Bai’Inah Facility, also due to constrained cash flow.

The report added that the facility was completely settled on June 1 after SME Bank exercised its rights in uplifting a fixed deposit for its repayment.

The group reportedly said that the amount defaulted as on December 22 of last year also included Ta’widh, the compensation charge for late payment, equivalent to the actual loss at the rate of 1 per cent per annum on the overdue amount.

Yesterday, the High Court in Kuala Lumpur reportedly approved the liquidator’s application for the authority to continue Serba Dinamik’s operations and three liquidating companies for 365 days beginning on July 9, 2023, and ending on July 8, 2024, a necessary move for the beneficial liquidation of the companies.

The group was reportedly given Practice Note 17 status, which is issued by Bursa Malaysia to companies facing financial distress, following its external auditor expressing a disclaimer of opinion on its audited financial statements for the 18-month financial period ending on June 30, 2021.

In May, four senior officials from the group were reportedly fully acquitted of charges of submitting a false statement to Bursa Malaysia last year.

Serba Dinamik and its four top executives were charged with submitting a false statement to Bursa Malaysia Securities Berhad on February 26, 2021, in relation to the revenue figure of RM6.014 billion contained in the company’s Quarterly Report on Consolidated Results for the Quarter and Year ended December 31, 2020.