Bintai Kinden secures RM59m debt settlement plan, shareholders' nod for private placement

• "This pivotal agreement entails an immediate disbursement of RM1.5 million to OPM by Jan 30, 2024, and a series of six RM250,000 per month instalments totalling an additional RM1.5 million from January to June 2024."

KUALA LUMPUR (Jan 29): Bintai Kinden Corp Bhd, which fell into Practice Note 17 (PN17) status in March 2023, has obtained an interim settlement plan from a debtor as well as the approval of its shareholders for a private placement exercise, developments the group hailed as "strategic advancements towards financial resiliency and operational vitality".

In a statement on Monday, the mechanical and electrical engineering services specialist and medical device manufacturer and facilities operator said its wholly owned subsidiary Optimal Property Management Sdn Bhd (OPM) has accepted an interim settlement proposal (ISP) with Kolej Teknologi Islam Melaka Bhd (KTIMB) over its default and outstanding debts of RM58.9 million.

"This pivotal agreement entails an immediate disbursement of RM1.5 million to OPM by Jan 30, 2024, and a series of six RM250,000 per month instalments totalling an additional RM1.5 million from January to June 2024.

"In addition, as part of the ISP terms, KTIMB has agreed to work with and conclude a final settlement with OPM by May 31, 2024, by evaluating three options, namely the termination of the current concessionaire agreement (CA), a possible takeover of OPM by KTIMB or a designated entity at an agreed valuation, or a restructuring of the outstanding CA-related debts and charges," said Bintai Kinden.

Bintai Kinden slipped into PN17 status after it defaulted on RM109 million worth of financing facilities from MBSB Bank Bhd, as KTIMB owed RM49.8 million to OPM for the construction of a hostel for Universiti Melaka.

KTIMB had awarded the RM121 million project to OPM via a CA in 2016.

After the default, MBSB terminated Bintai Kinden's role as the corporate guarantor for the Islamic banking facilities, triggering Paragraph 2.1(f) of PN17 of the Main Market Listing Requirements, which pertains to a default in payment by a listed issuer, its major subsidiary or major associated company, and is unable to provide a solvency declaration.

MBSB then sued Bintai Kinden over the default, and claimed an outstanding amount of RM238.52 million up to April 6, 2023, as well as compensation charges of 1% per annum on the amount of RM107.54 million calculated from April 7, 2023, until the date of judgement.

In December 2023, however, MBSB withdrew its suit against the group after Bintai Kinden managed to secure a conditional relief indulgence (CRI) agreement to settle RM3 million worth of debt with the bank.

The agreement involves a six-month relief period for OPM, with a monthly loan repayment of RM500,000.

Meanwhile, the group has also received its shareholders' approval at an extraordinary general meeting (EGM) held on Monday for a proposed private placement of up to 281.5 million new ordinary shares amounting to 30% of its total issued shares.

According to a circular to shareholders concerning the fundraising exercise, the shares will be priced at no more than a 20% discount to the five-day volume weighted average price of the shares up to and including the last trading day preceding the price-fixing date.

Assuming a hypothetical price of 6.6 sen per share, the group said it will raise up to RM18.58 million, of which up to RM12 million will be used to pare down its bank borrowings, while up to RM5.74 million will be used as working capital, while the remaining amount will be used to defray expenses incurred by the private placement.

“Today’s EGM approval and the ISP with KTIMB are yet another significant development for [Bintai Kinden]. While the latter (ISP with KTIMB) further validates the legitimacy of the CA by OPM, the shareholders’ approval demonstrates the shareholders’ trust in our direction.

"As the new management continues to steer the Bintai Kinden group forward, these steps are necessary in laying a solid foundation for Bintai Kinden’s financial stability as well as future growth and stability," said the group's managing director and chief executive officer Datuk Tay Chor Han in the statement.

As at the second quarter ended Sept 30, 2023 (2QFY2024), Bintai Kinden sank into a net loss of RM6.04 million, from a net profit of RM44,000 a year ago, as revenue plunged 83.82% to RM6.56 million from RM40.56 million.

Its current bank borrowings stood at RM248,000, while its non-current bank borrowings totalled RM145.20 million.

Meanwhile, its current assets amount to RM106.13 million, and its non-current assets amount to RM137.63 million.

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