Kuantan Flour Mills given extension till Sept 30 to submit restructuring plan

PETALING JAYA: Practice Note 17 (PN 17) company Kuantan Flour Mills Bhd (KFM) has received the approval from Bursa Securities for an extension of time up to September 30 to submit its regularisation plan.
The company told Bursa Malaysia that it had received a letter dated July 10 from Bursa Securities for the extension.
Trading in KFM securities will be suspended and delisted if it fails to submit the restructuring plan to the regulatory authorities for approval on or before September 30.
On March 29, the company proposed a private placement and five-for-two rights issue exercise to regularise its financial condition.
The private placement involves an issuance of up to 20.47 million new shares, representing about 30% of its existing shares in issue to raise RM4.09 million based on an issue price of 20 sen per placement share.
The shares will be placed out to Wong Sak Kuan, the controlling shareholder of Lotus, which is involved in the trading of industrial raw materials such as industrial and food grade starches, and industrial coal for power and steam generation as well as recycling.
Meanwhile, the rights issue of up to 221.74 million shares is expected to raise up to RM44.35 million for the company based on an issue price of 20 sen per rights share.
KFM also proposed a restructuring of debts owing to its creditors, whereby 60% of the indebtedness will be waived; 35% to be settled via the issuance of settlement shares; the remaining 5% to be settled in cash. The company's indebtedness stood at RM12.68 million as at December 31, 2016.
KFM has been in the red since 2009 due to volatility in raw material prices and stiff market competition which significantly affected its gross margin. For the second quarter ended March 31, 2017, its net loss narrowed to RM1.93 million compared with RM2.92 million in the previous corresponding period.
At 12.30pm, the counter was up one sen to 16.5 sen on some 222,800 shares traded, giving it a market capitalisation of RM11.26 million.