KUALA LUMPUR (Dec 17): Perak Corp Bhd has proposed a scheme of arrangement with its creditors that includes cash settlements worth over RM220 million, issuance of shares worth over RM30 million and a debt waiver amounting to RM544.55 million.
“The proposed scheme of arrangement is a comprehensive proposal aimed at resuscitating the financial viability of Perak Corp Group by restructuring the repayment of indebtedness due to the scheme creditors and the consequential interest servicing burden,” the group said.
“This will alleviate the financial burden of Perak Corp Group and enable the group to focus on reviving its business,” it said in a filing with Bursa Malaysia.
The creditors involved in Perak Corp’s debt settlement scheme include Affin Islamic Bank Bhd, CIMB Bank Bhd, Affin Hwang Investment Bank Bhd, Bank Pembangunan Malaysia Bhd and Malaysia Debt Ventures Bhd.
As of June 30, Perak Corp’s aggregate outstanding liabilities to be settled under the proposed scheme of arrangement stood at RM858.37 million.
When the scheme is completed, Perak Corp said its interest bearing borrowings due to the creditors will reduce to RM93.30 million.
The balance borrowings, the group added, will be paid from the group’s internally-generated funds and proceeds of the group to be generated in the ordinary course of business.
Perak Corp said the debt settlement is part of efforts towards the formalisation of the group’s regularisation plan to uplift itself from its Practice Note 17 (PN17) status.
The group said part of its RM220 million cash settlement will come from the sale of three pieces of vacant commercial land and one piece of vacant residential land in Hulu Kinta, Perak to the Social Security Organization (Socso).
A sum of RM70.81 million of the RM78.68 million proceeds from the sale will be used for the purpose, while the other RM7.87 million will go for working capital requirements, the group said.
Perak Corp said it will also look for an investor within the next six months to sell off two parcels of freehold lands including the RM520 million Movie Animation Park Studio (MAPS) assets to satisfy a RM100 million cash settlement amount.
The theme park has been closed since Jan 28 until further notice.
The meeting with the scheme creditors, for Perak Corp to present its debt settlement proposals, is scheduled to be held on Jan 8, 2021.
Perak Corp was declared a PN17 firm in February, after the group defaulted on a repayment of principal in respect of the Musharakah Mutanaqisah Term Financing-i and Tawarruq Revolving Credit-i of up to RM100 million granted by Affin Islamic Bank Bhd.
Prior to that, on October last year, MAPS developer and operator Animation Theme Park Sdn Bhd — a 51%-owned subsidiary of PCB Development Sdn Bhd, which in turn is a wholly-owned unit of Perak Corp — defaulted in its repayment of principal for a syndicated term loan facility of up to RM280 million involving Affin Hwang Investment Bank Bhd, Affin Bank Bhd, Bank Pembangunan Malaysia Bhd and Malaysia Debt Ventures Bhd.
It was previously reported that Perbadanan Kemajuan Negeri Perak (PKNP) was interested in taking over MAPS for no less than RM245 million, but there has been no announcements of any fruition of the deal thus far. PKNP is Perak Corp’s largest shareholder with a 52.9% stake, followed by Sime Darby Property Bhd with 6.13%.
Earlier today, Bursa Malaysia imposed Perak Corp with an unusual market activity query over the sharp rise in its share price and volume.
Perak Corp later explained that other than the settlement arrangement exercise, it is not aware or currently involved in any other corporate development that has not been previously announced.
Perak Corp shares jumped 20 sen or 85.11% to close at 44 sen today, with a market capitalisation of RM43.5 million.
Source: The Edge