Running out of time

BARELY two weeks after government-owned Felcra Bhd walked away from a deal with ailing Kuantan Flour Mills Bhd (KFM), the latter has now found a new potential rescuer. This time, it is with little-known coal and starch trader Lotus Essential Sdn Bhd. KFM, which is a Practice Note 17 (PN17) company, is proposing an “equity fund-raising exercise” with Lotus Essential, as part of a plan to restructure KFM’s debt and revamp the business. KFM also said it has entered into a memorandum of understanding (MoU) with Lotus Essential to take on contract manufacturing and offtake agreements for the provision of flour-milling activities.

Will the rescue plan work out this time? On the face of it, the plan makes sense, as KFM is in dire need of operating income.