Destini Berhad (“the Company”) wishes to announce that its indirect subsidiary, Destini Shipbuilding and Engineering Sdn Bhd (“DSBE”) had been served with a statutory notice of demand under Section 466 Companies Act 2016, details of which are as follows:

1) Date of service of the Statutory Notice of Demand

The notice was issued by Clamshell pursuant to a Summary Judgment dated 30 March 2021 obtained by Clamshell against DSBE in the amount of RM849,500 with RM3,000 costs awarded by the Court.  

2) Details of the default or circumstances leading to the statutory notice of demand and the particulars of the claim under the statutory notice of demand, including the amount claimed for and the interest rate

The Writ of Summons was filed by Clamshell on 12 August 2020. DSBE filed an application to stay the proceeding of the Clamshell’s the Writ of Summons on 23 September 2020 on the ground that under the contract between DSBE and Clamshell any dispute shall be referred to arbitration under the Construction Industry Payment and Adjudication Act 2012. However, the Court did not accept this reason and DSBE lost the stay application on 17 December 2020 and the costs were awarded by the Court payable to Clamshell amounting to RM3,500. Clamshell filed a Summary Judgement application on 12 January 2021. The court awarded summary judgement in favour of Clamshell on 30 March 2021.

After failed settlement discussions, Clamshell issued a statutory notice of demand under Section 466 Companies Act 2016 on 3 May 2021 for a sum of RM910,138.08 (inclusive interest from the date of judgment until 3 May 2021).

3) Confirmation as whether DSBE is a major subsidiary

DSBE is not major subsidiary of the Company.

4) Cost of Investment in DSBE

The Company do not have direct investment in DSBE. The Company’s investment in shipbuilding activities is made through its wholly owned subsidiary, Destini Armada Sdn Bhd (“DASB”). The Company has made full provisions on its total investment cost in DASB totalling RM77,799,998.00 as 31 December 2020.

5) The financial and operational impact of the Judgment on the Group

There is no impact on the operation of Destini Group. This is in view that the Judgment sum of RM910,138.08 has been incorporated in the financial statements.

6) The expected loss, if any, arising from the Writ of Summons

The Company is not expected to incur any further loss arising from the Writ of Summons.

7) Steps taken in respect of the Writ of Summons

The Company appealed for payment of the actual outstanding amount without interest. However, Clamshell refused and insists DSBE to pay the full amount with interest. In response to the said demand, several negotiations were held between DSBE and Clamshell to reach an amicable solution to resolve the matter. DSBE requested for indulgence for settlement in view of the ongoing conditional share sale of DSBE’s interest in THHE Destini Sdn Bhd (“TDSB”) to THHE Fabricators Sdn Bhd and the Share Sale Agreement (“SSA”) was signed on 21 April 2021 which was announced to Bursa Malaysia Securities Berhad on  21 April 2021.

Among the terms of the SSA is that the outstanding liabilities related to the Offshore Patrol Vessel (“OPV”) project will be novated to TDSB. As Clamshell’s debt is an outstanding liability under the OPV project, Clamshell’s debt will be novated to TDSB for payment. As at the date of this announcement, parties are finalizing the terms of the deed of novation and complying with the conditions precedent in the SSA.

This announcement is dated 1 July 2021.