Bid to wind up APH heads to court
KUALA LUMPUR: Asia Petroleum Hub Sdn Bhd’s (APH) main contractor yesterday issued a public notice that it will next week commence a winding-up petition against the troubled company.
This comes as APH’s appointed receiver and manager, PricewaterhouseCoopers (PwC), is seeking to carve out its assets for a restructuring scheme. Although APH’s tangible assets are only worth an estimated RM19.8 million, its crown jewel is the rights to develop the petroleum hub and bunkering facility on a 100-acre (40.4ha) man-made island off Tanjung Bin in Johor.
According to a notice of petition published in an English newspaper yesterday, ZAQ Construction Sdn Bhd’s application to wind up APH will be heard next Monday at the Kuala Lumpur High Court’s commercial division. ZAQ filed the winding-up petition in January after it won a judgment-in-default against APH last December to the tune of RM419.73 million for services rendered.
An executive with knowledge on the court proceedings said ZAQ has been preparing the groundwork to wind up APH and is expected to update the court on the latest developments. But ZAQ’s winding-up petition against APH has also raised questions as to who has legal claim over APH’s rights to develop the petroleum hub.
Separately, PwC has been firming up a new scheme to bring on board new investors to finance the remainder of the project which is said to be at 60% completion. Under the new scheme, APH’s rights to develop the project will be transferred to a special purpose vehicle.
PwC was appointed by APH’s lead financier CIMB Bank Bhd to restructure APH after CIMB Bank ceased funding for the project that was plagued by delays and cost overruns. Last Wednesday, PwC placed a half-page advertisement in the business news section of an English daily calling for expression of interest to acquire APH’s conditional rights to the project.
The petroleum hub is planned to have a total capacity of 924,000 cu m wiThisnter-tank connectivity for blending options and space dedicated for multiple users, according to the advertisement. ZAQ’s winding-up petition, if successful, will deal a blow to PwC’s attempt to restructure the project.
According to a corporate lawyer, one of the crucial legal provisions that could come into play is Section 223 of the Companies Act 1965. Section 223 states that once a winding-up petition has been commenced against a company, any disposal of properties of the said company shall be void unless the court orders otherwise.
This includes any transfer of shares or alteration in the status of the members of the company. It is presently uncertain whether PwC will oppose or seek a temporary stay of the winding-up petition filed by ZAQ. Any creditor or party intending to support or oppose the winding-up petition may give due notice and appear on the scheduled day of hearing, according to ZAQ’s public notice.
“As far as they [ZAQ] are concerned, they have not been informed of any objection and will proceed on Monday,” said the executive. ZAQ’s lawyers declined to comment while PwC and its lawyers were unavailable for comment at press time. Interestingly, the road for ZAQ’s winding-up petition was cleared after PwC withdrew its earlier restraining order which was sought to prevent
APH’s creditors from winding up the company. PwC withdrew the order on June 27, a day after CIMB Bank stepped back from supporting an earlier debt-to-equity restructuring scheme. The moves were seen as paving the way for new investors to come in to assist the ailing project. The earlier proposal would have seen CIMB Bank and APH’s unsecured creditors swap their debt for equity in APH.
One of APH’s unsecured creditors that was keen on the debt-to-equity scheme was Muhibbah Engineering (M) Bhd, which was the project’s main sub- contractor. Muhibbah had in January filed its own legal claim against APH and ZAQ for RM381 million owed to it.
-This article appeared in The Edge Financial Daily July 10, 2012.