MATERIAL LITIGATION KUANTAN FLOUR MILLS BERHAD (" the Company" or "KFM") Kuala Lumpur High Court Guaman No. 22NCC-46-03/2015 LH Asian Trade Finance Fund Ltd ( "LH") v Kuantan Flour Mills Berhad ( "KFM") S218 Notice
| KUANTAN FLOUR MILLS BHD |
| Type | Announcement |
| Subject | MATERIAL LITIGATION |
| Description | KUANTAN FLOUR MILLS BERHAD (" the Company" or "KFM")
Kuala Lumpur High Court Guaman No. 22NCC-46-03/2015
LH Asian Trade Finance Fund Ltd ( "LH") v Kuantan Flour Mills Berhad ( "KFM")
S218 Notice
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Further to our
announcement dated 26th June 2015, the Board of Directors of KFM wishes
to inform that, on 20 April 2016, the Company via its solicitor,
received a copy of the 218 Notice dated 19th April 2016 filed by LH
Asian Trade Finance Fund Ltd via its solicitor, Messrs. Skrine claiming
for a sum of USD1, 372,473.61.
The Company had engaged its solicitor to defend the above claim. Nevertheless, we shall continue to engage with LH Asian Trade Finance Fund Ltd for an amicable solution. This announcement is dated 21st April 2016. very very risky
It saw renewed hopes of a regularisation plan from the Practice Note 17 (PN17) company after it signed a MOU with Lotus Essential Sdn Bhd. Lotus is a company involved in the trading of steam coal, corn and tapioca starch.
The parties are desirous to enter into a contract manufacturing and offtake agreement for the provision of flour milling activities by KFM to Lotus [Essential]; and consider a strategic investment by Lotus [Essential] into KFM.
As part of its proposal to restructure its debt and reconstruct its business, KFM proposes to carry out an equity fundraising exercise via a rights issue and special issue of its shares, besides collaborating with Lotus Essential to carry out flour milling activities and trading of flour and food-related products.
On Dec 13 2016, KFM applied to Bursa Malaysia for a six-month extension of the deadline to submit its regularisation plan.
KFM had been reporting losses over the past few years and was classified as a PN17 company on Dec 28 2015.
For the financial year ended Sept 30, 2016, it reported a net loss of RM12.09 million on revenue of RM3.92 million, as against a net loss of RM16.85 on revenue of RM24.86 million a year earlier.
Lotus Essential posted a net profit of RM217,024 on revenue of RM27.38 million for the financial year ended April 30, 2015. Its current assets stood at RM12.13 million, while its current ratio was 1.06, indicating the strength of its current assets.
KSM has received two summons totalling RM235,232.10 from two companies which had provided it with services. Gebeng Tyres & Services Sdn Bhd (GTS) had in a letter dated Dec 20 filed a writ of summons and statement of claim for a sum of RM161,182.10 with an interest of 5% per year on the amount.
Meanwhile, DPO Malaysia Sdn Bhd, which provides services for the food industry, issued KFM a writ of summons and statement of claim on Dec 15 for a sum of RM74,050. The summons also included interest on the sum at the rate of 18% per year from May 15, 2015 and interest on the judgement sum at the rate of 5% per year.
In both cases, KFM is required to file a memorandum of appearance in court within 14 days from the date of service from the writs. Save for the outstanding payment sums due and legal costs in defending against the writs, the company is not expected to incur any further losses arising from the writs.
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