KUALA LUMPUR (September 20): Sarawak Consolidated Industries Bhd (SCIB) is set to earn US$13.32 million (RM60.72 million) after customers of six contracts in Qatar and Oman agreed to take over the debts that the group owes to its subcontractors for the projects.
SCIB’s debts of US$133.42 million to sub-contractors are to be borne by the respective clients of the projects and are to be discharged using the debts of US$146.74 million that the clients owe to SCIB and its SCIB International (Labuan) Ltd (SCIBL) unit, the group said in a filing from Bursa Malaysia.
SCIB said it has signed novation agreements with Pavilion Qatar Engineering Co WLL, Revenue International LLC, Interpreter Trading & Contracting WLL and Skyview Trading & Contracting WLL in both countries to amend their previous settlement agreements to facilitate debt settlement. .
“Clients undertake to fulfill the obligations of SCIB and SCIBL to pay [amount owing to the subcontractors] to the respective subcontractors under the Settlement Agreement from the Effective Date (June 30, 2022) and to be bound by the terms of the Settlement Agreement in all respects in lieu of the SCIB and the SCIBL.
“It is agreed and acknowledged by the respective sub-contractors to collectively release and discharge SCIB and SCIBL from all claims and demands regarding the settlement agreements from the effective date,” the civil engineering group said. based in Sarawak.
SCIB said the parties have agreed that customers must pay the differential sum of RM60.72 million – the net amount between the amount owed by customers to SCIB and the amount owed to subcontractors – to the group no later than June 30, 2023. .
“The definitive claims set out in the settlement agreements are in accordance with the provisions that have been included in the accounts.
“The effect of the novation agreements is to supersede the obligations of SCIB and SCIBL to pay contractors under the settlement agreements in which the obligations now shift to the customers,” he added.
In November last year, SCIB signed a settlement agreement with project customers to terminate the engineering, procurement, construction and commissioning contracts awarded to SCIB and SCIBL in order to mitigate the risks arising from long-standing debts owed by its creditors.
The contracts included works related to the construction of villas, buildings and service centers, as well as civil works for a fire water project in Qatar and Oman.
Shares of SCIB ended unchanged at 14.5 sen on Tuesday (20 September), giving the group a market capitalization of RM87.41 million.