KUALA LUMPUR (Sept 30): The High Court granted leave to Prestariang Bhd’s indirect subsidiary Prestariang Skin Sdn Bhd (PSkin) to commence meetings with its creditors on the latter’s debt restructuring exercise.

As at June 30, Prestariang’s total borrowings stood at RM65.54 million, of which RM26.9 million was revolving credit.

The application of the leave was on the ground that PSkin could preserve its going concern while it carries on with negotiations and legal action to seek compensation from the federal government for the termination of the RM3.5 billion Sistem Kawalan Imigresen Nasional (SKIN) contract.

Judicial commissioner Liza Chan granted the leave pursuant to Section 366 of the Companies Act 2016 today.

The section gives the court the power to order a compromise or arrangement with creditors and members in the form of an approved debt-restructuring arrangement.

In an announcement to Bursa Malaysia today, Prestariang said it is in the process of finalising the arrangement with its creditors and will make an announcement in due course.

“The High Court of Malaya has granted, among others, leave to PSkin on Sept 30, 2020 to summon meetings of creditors of PSkin or any class of them to be held within three months of the date of the court order for the purpose of considering and, if thought fit, approving with or without modification the proposed scheme of arrangement, pursuant to Section 366 of the Companies Act 2016,” the statement read.

Nathalie Ker of Lim Chee Wee Partnership appeared for PSkin.

To recap, PSkin, an operating unit under Prestariang, initiated the legal action to seek RM732.86 million in damages after the government terminated the SKIN project that was awarded to PSkin in 2017.

The SKIN project involved a three-year build and deployment phase and a 12-year maintenance and technical operation phase. Payment by the government to PSkin was to commence upon the full commissioning of the system with an average annual payment of RM294.7 million.

Prestariang slipped into a net loss of RM16.7 million on revenue of RM154.64 million for the six-month period ended June 30.

The company’s share price staged a strong rally in mid-March, rebounding from a low of 11.5 sen. However, the stock has retreated from a peak of RM1.16 to 56.5 sen today.