PETALING JAYA: Former Bio Osmo Bhd managing director Datuk Seri Krishna Kumar Sivasubramaniam has come out to address speculation that he is selling out of the company and that the business direction of the company is changing.
Krishna resigned from his position as of June 30, citing the need to concentrate on personal career objectives as the reason.
“I will continue to assist the company. I am still the major shareholder of the company. The water business remains. The status quo remains,” said Krishna.
When asked whether he intended to sell his shares in the near future, Krishna said: “If the price is right, who wouldn't?”
Krishna said that in the last six months, he had already been preparing to hand over the reins to an existing executive director.
However, sources close to the deal said that a new shareholder would emerge in the company and that the water business would be made non-core as a result of the debt-restructuring scheme.
“This new shareholder is quite a prominent corporate name known by most market players. This new shareholder does not intend to maintain the water business,” said a source.
Krishna said that he came into Bio Osmo as an investor.
“I am a restructuring specialist. My niche is in turning around financially weak companies and putting them on a better footing. I did not start Bio Osmo. I bought the 25 million shares in the company back in 2007 from the wife of the founder, T.C. Lim, after he died,” explained Krishna.
Presently, Krishna has an indirect interest of 12.5% in the company. The largest shareholder is Perbadanan Nasional Bhd (PNS) with a 20.78% stake.
“The company is now on much better footing. We have just completed the negotiation for a debt settlement scheme in May this year, although the collateral has yet to be issued to the bank. The scheme has been approved by the company and this process is pending completion in three months time. The major shareholder PNS will see through the completion of the exercise,” said Krishna.
The bank debts include a collaterised loan obligation (CLO) worth RM42mil owed to bondholders of Idaman Capital Bhd.
The net effect of this debt settlement exercise will see Bio Osmo's share capital base increase and the company being debt free. Sales of bottled water will also increase to 500,000 cartons from 300,000 cartons presently.
Krishna explained that he took the position of managing director in 2009 because at that time, he was the only executive director around. He first came into the company as a non-executive director and subsequently became executive director in 2009.
Krishna said that in 2007, the company only had RM20,000 in the bank and was only selling some 60,000 cartons of bottled water. Through the efforts of Krishna and his new team in 2009, the company was selling 180,000 cartons by 2010. By June last year, the company embarked on an internal restructuring plan which addressed the legacy bank debts of RM65mil and RM12mil owned to creditors.
Bio Osmo has been loss-making in the last four year. It was listed on Dec 5, 2007 at an initial public offering price (IPO) of 33 sen. The stock tanked on its first day of listing and to date, has yet to go beyond its IPO price.
It touched its 52-week high of 23 sen on Feb 13 this year. Its year low was 5.5 sen on Oct 8 last year.
Bio Osmo made a RM10.7mil provision on doubtful receivables for its financial year (FY) year ended June 30, 2009 and subsequently a further RM4.5mil in FY2010.
For its third quarter to March 31, 2012, the company made a net loss of RM2.5mil from a previous net profit of RM3.49mil. This was on the back of a a 45.15% drop in revenue to RM2.25mil.
For the nine-month period, the company made a net loss of RM5.82mil from a net profit of RM642,000 previously. Revenue dropped 69% to RM3.74mil mainly on lower sales of its bottled water and energy drinks.