Bina Goodyear’s restructuring plan rejected

PETALING JAYA: Trading of shares in Bina Goodyear Bhd, after 21 months as a Practice Note 17 company, will be suspended from Aug 12, 2014, after Bursa Malaysia rejected its regularisation plan, saying that it is not sufficiently comprehensive and is incapable of resolving all its financial problems.

In filings with Bursa Malaysia, the construction and building contractor said its proposed regularisation plan was rejected by the regulator yesterday, resulting in the suspension of its shares with effect from August 12.

Bursa Malaysia said the rejection was due to the company's continued reliance on its existing business to turnaround its financial condition, while the company and its principal advisers have not satisfactorily addressed the regulator' concerns on the ability of the company to comply in particular with Paragraph 5.2(c) of PN17.

"Even with the entry of the new substantial shareholders in December 2011, there are concerns on the ability of the company to sustain and grow the revenue and profitability from the core business of Bina Goodyear," Bursa Malaysia opined.

The securities of Bina Goodyear will be delisted on September 8, unless an appeal against the rejection of the regularisation plan and de-listing is submitted to Bursa Securities on or before September 3.

Bina Goodyear said the board will deliberate on the next course of action and will make the relevant announcement in due course.

Bursa Malaysia said the company only managed to secure minimal order books and contracts over the last two years and recorded minimum revenue for the latest quarter ended March 31, 2014.

Besides that, the expiry of Bina Goodyear's Construction Industry Development Board license which has not been renewed to-date, has resulted in it fully subcontracting the construction works for the two contracts it has secured. BIna Goodyear also has limited resources, in particular operational resources, to undertake its core business activities.

Bursa Malaysia also stated that there are concerns on the ability of the proposed acquisition of construction projects by the company to improve its financial condition and level of operations.

Bina Goodyear, which has been a Practice Note 17 company since November 2012, had in last March submitted the application in relation to its proposed restructuring scheme.

It involves a proposed capital restructuring, renounceable rights issue of up to 254.39 million new shares, offer for subscription of up to 48.28 million new shares, private placement of 50 million new shares and scheme of arrangement.

It also includes the proposed acquisition of the construction business of Astinas Construction & Development Sdn Bhd (ACD) for RM10 million cash and acquisition of 28% interest in Ontime Privilege Sdn Bhd together with the assignment of advances of the vendors to Bina Goodyear for RM9.62 million to be satisfied via the issuance of 96.28 million new Bina Goodyear shares.

Bina Goodyear had in December last year entered into a business acquisition agreement with ACD for the proposed acquisition of the construction projects amounting to an order book of RM250 million, with projects predominantly in Johor.

It has been making losses over the past five years, with a net loss of RM300,000 for the third quarter ended March 31, 2014.

Bina Goodyear shares untraded yesterday, with the last trading price of 15.5 sen last Thursday.