Ho Wah Genting to repay US dollar debts

KUALA LUMPUR: Loss-making group Ho Wah Genting Bhd intends to repay its high interest debts denominated largely in US dollars as soon as possible, to reduce the debt burden that had affected the group’s bottomline.
As at Dec 31, 2014, its bank borrowings stood at RM47.52 million, with a gearing of 0.87 times.
Executive chairman Datuk William Teo Tiew (pix) said the proposals approved by shareholders at its EGM yesterday, including a par value reduction and rights issue with warrants will enable the group to recapitalise itself and lighten its debts.
The par value reduction of 15 sen of each share of 20 sen to 5 sen will result in a credit of RM92.64 million that can be used to offset the group’s accumulated losses, while the rights issue with warrants would raise RM49.5 million primarily to repay its debts.
“After the completion of the proposed exercises, based on the amount of money raised, we can pay off our borrowings, and this will allow us to look for new businesses.
“Going forward, it (losses) will be less. At least we don’t have to carry the burden of interests,” he told SunBiz.
Ho Wah Genting had been incurring losses yearly since the financial year ended Dec 31, 2011. The group is mainly involved in the manufacturing and trading of wire and cable, and moulded power supply cord sets. It is also in the tin mining, travel services and direct selling businesses.
About 97.81% of the group’s revenue is derived from the wire and cable business, with the US being the biggest market.
Teo reiterated that the group is in discussions to sell its loss-making non-core business.
Besides undertaking measures to improve performance in its primary segments as well as the repayment of debts, the group is also actively seeking new business opportunities of growth to further address the group’s financial concerns as well as to diversify into business opportunities of growth to reduce the group’s dependency on the manufacturing of moulded power supply cord sets and wire and cables.
“We’re looking for new ventures that can give us cashflow, can sustain and with a recurring income nature,” said Teo, but added that it is yet to identify any new ventures.