The rise and fall of Sarawak Cable

The once rising star in Sarawak’s corporate landscape has descended into financial distress, with little sign of a turnaround.

However, its starlight has dimmed considerably in recent years as it descended into financial distress, boardroom controversies, and legal battles. It also suffered the ignominy of being delisted from Bursa Malaysia in July this year.

Established in 1998, Sarawak Cable appeared to have everything going for it in its early years.

It enjoyed significant progress following its 2010 listing to become Malaysia’s largest power cable manufacturer with annual revenues exceeding RM1.2 billion.

The period after its listing was one of accelerated growth and expansion, marked by several strategic moves.

The most pivotal was the acquisition in 2014 of two rival cable manufacturers – Universal Cable (M) Bhd and Leader Cable Industry Bhd (LCIB) – for a total of RM210 million. This made the combined entity the largest cable manufacturer in Malaysia and a leading player in Southeast Asia.

It also enabled the enlarged group to cast its net further afield as it began exporting high-voltage cables to high-margin export markets like Australia, Singapore, New Zealand and the Middle East.

In a concerted effort to move up the value chain, it diversified from being a mere cable manufacturer into an integrated power solutions provider.

This meant offering services like fabrication of steel poles and towers, hot-dip galvanisation, and the construction of transmission lines and even mini-hydro plants.

This enabled the group to clinch some lucrative contracts, including a RM619 million 500kV transmission line project in Sarawak, supply contracts for Tenaga Nasional Bhd (TNB) projects, and work for the Petronas Pengerang Integrated Petroleum Complex in Johor.

The world was Sarawak Cable’s oyster, or so it seemed.

Shareholder pedigree

Crucially, the company had the solid support of Sarawak state and possessed a shareholder pedigree that was second to none.

The Sarawak government had invested in the company via Sarawak Energy, giving it access to power projects implemented by the state power utility company as well as TNB.

More significantly, its largest shareholder was Mahmud Abu Bekir Taib, the son of former Sarawak chief minister Abdul Taib Mahmud. He held an 18.64% stake while Sarawak Energy was the third largest shareholder with a 13.13% stake, as of March this year.

Abu Bekir served as the company’s non-executive chairman from 2009 until he was redesignated as a non-executive director in late 2024.

Being led by a corporate figure with strong ties to the state government was regarded by many, rightly or wrongly, as highly advantageous for Sarawak Cable. However, the reality was far different.

Helicopter woes

Some critics said things started unravelling for Sarawak Cable when its leadership made the crucial decision to move beyond its core business.

While diversification can be an astute move, some of Sarawak Cable’s forays were puzzling to say the least, with dire financial consequences.

The chief headscratcher was its purchase of a new Airbus EC225 Super Puma helicopter in 2016 for about RM100 million, with the intention of leasing it for infrastructure and power line projects.

However, its diversification into aviation was undone by a cruel twist of fate. In April 2016, shortly after delivery, a fatal crash of a similar Super Puma helicopter in the North Sea prompted the global grounding of all EC225s.

The grounding dealt a big blow to its cash flow as it could not generate any income even as the financing costs continued. By 2020, the group was forced to exit the helicopter business as losses continued to pile up.

Sarawak Cable’s move to diversify into transmission line projects also ran into difficulties. In 2014, the company was awarded a RM257 million contract by Petronas to build a high-voltage 275kV transmission line at its refinery and petrochemical integrated development (Rapid) project in Pengerang, Johor.

The project, scheduled for completion in 2016, was plagued by cost overruns and delays, resulting in escalating costs and penalties. It was only completed in 2018, resulting in the company being liable for liquidated damages.

The Rapid project’s troubles contributed to a RM47.6 million pre-tax loss for the transmission construction segment. This led to Sarawak Cable posting its first full-year net loss (RM36.3 million) in over a decade in FY2017.

Things only went downhill from then on with the company grappling with huge losses, creditor lawsuits, and allegations of mismanagement.

Financial woes

In September 2022, its external auditor red flagged the dire state of the company’s finances. The auditor issued a disclaimer of opinion on its FY2022 financial statements, citing an inability to obtain sufficient audit evidence and serious doubt about its going concern viability.

Sarawak Cable was then classified as a Practice Note 17 (PN17) company by Bursa Malaysia, which requires financially distressed companies to formulate a regularisation plan to continue its listing status.

By the end of 2023, the group’s loans and borrowings had amounted to RM393.77 million. The company and its core subsidiaries, Universal Cable and Leader Cable Industry, were sued by creditor banks.

The High Court placed Sarawak Cable under interim judicial management in July 2023 due to a claim for unpaid legal fees, further complicating restructuring efforts.

Attempts to revive the company through a “white knight” investor — UK-based Serendib Capital Ltd — fell through in May 2024 after both parties failed to reach agreement on an exclusive working relationship. This sparked legal battles between the parties, and the company’s then chairman Abu Bekir.

With the company’s debts and liquidity issues continuing to mount, Sarawak Cable failed to finalise a regularisation plan despite multiple extensions.

Bursa Malaysia suspended trading of its shares on May 28, 2025, and delisted the company on July 15, 2025.

The company continues to operate as an unlisted private entity with shareholder rights protected under the Companies Act 2016.

Even as the dust settled post-delisting, the outlook for the company remains bleak as much needs to be done to unravel the financial mess it finds itself in.

In the immediate future, the focus shifts to the courts to determine whether anything can be salvaged from the wreckage of what was once an industry-leading company that was the pride of Sarawak.