Perwaja regularisation plan aborted

PETALING JAYA: Loss-making steel maker Perwaja Holdings Bhd’s regularisation scheme has hit a stumbling block as its agreements with its white knight, Chinese conglomerate Tianjin Zhiyuan Investment Group Co Ltd, have lapsed.
Perwaja said the parties were not able to fulfil the conditions within the timeline stipulated under the master framework agreement and the supplemental master framework agreement between Perwaja, its subsidiary Perwaja Steel Sdn Bhd (PSSB) and Tianjin Zhiyuan’s wholly-owned Zhiyuan International Investment & Holding Group (Hong Kong) Co Ltd.
“Given the lapse of time to fulfil the conditions precedent, Perwaja and PSSB on Feb 8 notified Zhiyuan that the agreements have lapsed and expired and neither party shall have any obligation to the other,” Perwaja told Bursa Malaysia yesterday.
On July 15, 2015, Perwaja announced a capital injection of RM1.8 billion by Zhiyuan to revive its manufacturing plant in Kemaman, Terengganu. This would have seen Zhiyuan emerge as the single largest shareholder of Perwaja with a stake of 64.25%. Currently, Tan Sri Abu Sahid Mohamed is Perwaja’s biggest shareholder with a 60.21% interest through his holdings in Kinsteel Bhd and other companies.
Zhiyuan is involved in various businesses such as minerals, chemicals, alloys, new materials, construction materials, commercial real estate, logistics and international trading.
Perwaja has ceased operations since August 2013 following the curtailment of gas and electricity supply by Petroliam Nasional Bhd and Tenaga Nasional Bhd. The steel maker incurred a net loss RM62.39 million for the first quarter ended Sept 30, 2016.
Perwaja said it will decide on the next course of action, and will make a further announcement in due course. It has until March 30 2017 to submit its regularisation plan.
Perwaja’s share price rose half a sen to close at 10 sen yesterday.
In another development, Perwaja was yesterday served with a writ of summons and statement of claims by Syarikat Air Terengganu Sdn Bhd, claiming RM1.97 million for outstanding water bills and interest. Perwaja has accrued an outstanding water bill for the period from April 1, 2014 to Feb 1, 2017.
The case has been fixed for case management at the High Court of Kuala Terengganu on March 1 2017.