KUALA LUMPUR (Feb 9): The Scomi Group was once an investor favourite but over the years, it seems to have lost its lustre. The group sailed through the oil price surge from 2008 but faltered shortly after, dragged down by a lack of efforts to recapitalize by the shareholders as well as other external factors.

Scomi Group is on the brink of being classified as a PN17 company, a category for cash-strapped entities under Bursa Malaysias listing rules, and its other units are not doing too well either. Just last month, what seemed like infighting broke out between Scomi Group Bhd and its 65 percent subsidiary Scomi Energy Services Bhd over certain related-party transactions involving loans between the two. The matter is now the subject of an investigation.

Aside from this, there are other issues as well, such as Scomi Engineering Bhd and its joint-venture partner being terminated from an operations and maintenance contract at the Mumbai Monorail project in India. Scomi Energy Services Bhd has been awarded contracts worth a total of US$150 million (about RM610 million) by Kuwait Oil Company (KOC).

In a filing with Bursa Malaysia, Scomi Energy said its wholly owned subsidiary Scomi Oiltools Sdn Bhd entered into two contracts for the provision of mud products and mud engineering services. The two contracts, dated Jan 31 and Feb 4, are for deep drilling and development drilling respectively.

The contracts are for a period of five years and they are expected to contribute positively to the companys earnings over the period. What has happened to the companies under the Scomi stable?

Required:

(a) Recently, you had been appointed as the risk analyst by the Scomi Group Bhd. You are required to prepare risk management plan on the risks happened on this company. The plan must follow the five steps of risk management plan as below: