Bintai Kinden Corporation Berhad (BKCB) plans another round of private placement after it has been catagorised as an affected listed issuer pursuant to Practice Note 17 (PN17) of the Main Market Listing Requirements of Bursa Malaysia Securities Bhd.
The company has been classified as an affected listed issuer pursuant to PN17 of the Listing Requirements since 29 March 2023 following a default in payment by Optimal Property Management Sdn Bhd, a wholly-owned subsidiary of the Company, for Islamic banking facilities granted by MBSB Bank Berhad (MBSB) for an amount of RM109 million.
In a Bursa listing today (Dec 1), BKCN said the proposed private placement of up to 281.54 million new ordinary shares, representing 30% of the existing total number of issued shares (after rounding down to the nearest 1,000 shares), to independent third-party investor(s) to be identified later.
“(The proposed private placement) is to be undertaken based on the existing total number of 938 million issued shares as at 8 November 2023, being the latest practicable date prior to this announcement (LPD).
It said that this being undertaken as an interim fund-raising exercise aimed at supporting the group’s cash flow pending the formulation and implementation of the regularisation plan.
“For avoidance of doubt, the proposed private placement does not form part of the regularisation plan to be submitted to the relevant authorities in relation to the regularisation of the BKCB’s status as an affected listed issuer pursuant to PN17 of the Listing Requirements.
It has been catagorised as an affected listed issuer pursuant to Practice Note 17 (PN17) of the Main Market Listing Requirements of Bursa Malaysia Securities Bhd, as it has triggered the prescribed criteria under Paragraph 2.1(f) of PN17.
“As at the date of this announcement, we are in the midst of formulating a regularisation plan to regularise its PN17 status.
“In the meantime, the other banking facilities of BKCB and its subsidiaries (BKCB group or group) have either been cancelled or suspended, thus putting the group’s cash flow under severe strain,” it said.
The group said currently, it is in the midst of restructuring and/or rescheduling its borrowings and has implemented a group-wide downsizing and pay cut on 1 June 2023 as part of its cost reduction measures.
“This has resulted in an exodus in the group’s workforce whereby the group’s staff headcount has reduced from 116 employees in May 2023 to 32 employees as at end of October 2023.
“Moving forward, the group will face difficulties in retaining existing staff as well as attracting new staff to replace certain key job functions that have been left vacant by those who have left the group following the group-wide downsizing and pay cut,” it said.
It added in order to continue meeting its monthly commitments for loan instalment payments, staff salaries as well as other operating and administrative expenses, the group requires an urgent injection of working capital.
On 6 January 2023, BKCB announced that it proposed to undertake a private placement exercise involving the issuance of up to 85.31 million new shares (representing 10% of the then existing total number of issued shares before the private placement) (private placement June 2023).
The private placement June 2023 was completed on 26 June 2023, with 85.31 million shares raising a total of RM5.99 million. It was reported that it expected to raise up to RM7.44 million of the shares to at an illustrative issue price of 8.72 sen apiece — which represents a discount of approximately 10% to the five-day volume-weighted average price of the group’s shares of 9.69 sen.
The proceeds has been utlilised for repayment of bank overdraft, working capital requirements and expenses for the private placement.
