Technics O&G seeks JM as it faces a series of claims
With its back against the wall after a series of claims from
its Singapore- listed landlord and a past executive director, distressed
offshore support services firm Technics Oil & Gas has sought court
intervention as a last-ditch rescue attempt.
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Anita Gabriel
01 June 2016
With its back against the wall after a series of claims from its Singapore- listed landlord and a past executive director, distressed offshore support services firm Technics Oil & Gas has sought court intervention as a last-ditch rescue attempt.
Technics and its wholly owned Technics Offshore Engineering said on Tuesday that they had applied to the Singapore High Court to place the firms under judicial management.
Technics and its unit have each nominated Chia Soo Hien and Leow Quek Shiong of Messrs BDO LLP as judicial managers. The firm had called for a trading halt on its shares on Tuesday pending the announcement.
(Judicial management is a court-supervised process aimed to ensure the company's survival as a growing concern and seek a compromise with creditors and is deemed a better way to realise a company's assets than in a winding up).
The beleaguered firm has been hit by a raft of negative developments plus a great deal of selling and force selling of shares held by insiders which has badly bruised the stock. Technics' shares was last traded at a low of 7.1 Singapore cents on Monday - way low from its high of 74.5 Singapore cents reached last November.
BT understands that in March, the Singapore Exchange asked Technics to investigate allegations contained in a whistle-blower letter of insider trading and mismanagement by a past key executive of the firm.
The regulator also asked for a chronology of events and details on dates of discussions and parties involved in a major asset disposal and reverse takeover announced by the firm in mid-February which had not panned out.
When queried by BT on the matter, the SGX said it will "always review any complaints about listed companies". "However, any review is confidential and we won't be able to say anything including whether a complaint has been received and whether an investigation is underway," said June Sim, SGX head of listing compliance.
Technics halted trading on its stock at end-December 2015, following which it suspended trading in the counter for over a month. Trading resumed on Feb 15 after it announced that talks with a potential buyer for a disposal of certain of its assets and with another potential party on a reverse takeover had fallen through.
Upon trading resumption, the stock was pummelled to 11.9 Singapore cents from its pre-suspension price of 62 Singapore cents. The counter has since been on a slippery slope and drawn two trading activity queries from SGX over three months.
The decision to place the firm under judicial management was made under a newly-installed board led by executive chairman and group managing director AK Nathan following the emergence of Malaysian-listed Eversendai Corp as majority owner in early March. Mr Nathan is the founder and controlling shareholder of Eversendai, an engineering and construction services firm specialising in high-rise buildings and power plants with jobs largely in the Middle East.
Eversendai's just-released report card for first quarter ended March 2016 has not been spared by happenings in Singapore-listed Technics; it reported a loss of RM50 million (S$16.7 million) from a profit of RM19 million a year ago largely owing to impact on fair value of financial assets and unrealised foreign exchange loss.
The Malaysian firm's stake in Technics was built up over several transactions since late 2012 when the stock was trading at just over S$1, up to more recently in late February and early March when it picked up a 10.3 per cent chunk at much lower prices of between 12.2 and 13.7 Singapore cents.
Prior to this, according to sources, Technics had approached Soilbuild Reit to settle the issue of repayment "amicably". However, events ensuing indicate that it was a no-go for Soilbuild Reit. In response to BT queries, Soilbuild Reit replied: "We do not wish to further comment as this is pending an ongoing lawsuit."