Tajo expects to complete restructure by year-end


BY IZWAN IDRIS

TAJO Bhd expects to complete restructuring by year-end and return to profitability in the financial year ending Dec 31, 2004.  

“We hope to be re-listed by year-end. The company is looking forward to a promising future as a profit-making entity,’’ chief executive officer Yeoh Hong Hwang said after the group’s AGM and EGM in Kuala Lumpur yesterday. 

Tajo is in the process of implementing its restructuring scheme which involves a 100-to-one capital reduction, fund raising exercises, debt restructuring and acquisition of new assets.  

Upon completion of the restructuring scheme, the company's listing status would be transferred to a new company, Mithril Bhd. 

Trading in Tajo’s shares, listed under PN4-category on the KLSE, has been suspended since April 19 last year. 

“Post-restructuring, the group's core business would be in property management and manufacturing building materials. We are also planning to move into property development, possibly on a joint-venture basis with MAA Holdings Bhd,’’ Yeoh said. 

He said the foray into property development would add synergy to the group’s brick and cornice manufacturing activities. 

MAA Holdings is expected to emerge as Tajo’s single largest shareholder with about 50% stake after the restructuring.  

Under the proposed restructuring scheme approved by the Securities Commission, Tajo would acquire cornice maker Saferay (M) Bhd, and two office/commercial buildings – Menara MAA in Kota Kinabalu and Menara MAA in Kuching. 

“Saferay exports nearly 99% of its products. The company has reported RM26.8mil turnover and RM5.6mil pre-tax profit for the year ended April 30,” Yeoh said. 

He added that property rental income from the two office/commercial buildings was expected to contribute RM6.8mil per annum in fixed rental income over the next five years. 

Yeoh said Tajo's brick sales were expected to remain high this year. 

Last year, the company's sole manufacturing activity recorded a 93% growth in turnover to RM7.07mil from RM3.67mil a year earlier, cutting gross losses to RM3.95mil from RM5.87mil previously. 

For the year ended Dec 31, 2002, Tajo’s group revenue improved to RM7.32mil from RM3.83mil in the previous year, but pre-tax losses swelled to RM43.4mil. 

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