Moody's outlook on the Korean banking system has been negative since May 2016.
KUALA LUMPUR: Kuantan Flour Mills Bhd (KFM) is proposing an equity fund-raising exercise and a partnership with coal and starch trader Lotus Essential Sdn Bhd as part of its plan to restructure its debt and reconstruct its business.
In a filing with Bursa Malaysia, the Practice Note 17-affected company said it had signed a memorandum of understanding (MoU) to collaborate with Lotus, which imports, exports and trades steam coal, corn starch and tapioca starch, to carry out flour milling activities and trading of flour and food-related products.
The parties plan to enter into a contract manufacturing and offtake agreement for KFM to provide flour milling services to Lotus and to consider a strategic investment by Lotus in KFM.
KFM said it and Lotus would negotiate in good faith on the terms and conditions of the definitive agreements to be entered between them and strive to ink the definitive agreement within six months from the date of the MoU (Dec 27).
No further details were provided on the flour-milling partnership and fund-raising exercise.
Recently, Felcra Bhd retracted its intention to explore the possibility of participating in KFM’s equity. The announcement of Felcra’s interest sent KFM shares soaring from 4 sen each to 24.5 sen, but the price plunged after Felcra’s retraction.
KFM share closed 1.5 sen higher at 9 sen on Tuesday with 3.43 million shares changing hands.
KFM fell into PN17 status in December last year after its shareholders’ equity on a consolidated basis was 25% or less of its issued and paid-up capital of KFM and such shareholders’ equity was less than RM40mil based on its unaudited management accounts as at Nov 30, 2015.
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