KUALA LUMPUR: Perak Corp Bhd is selling its landbanks near Ipoh, Perak to the Social Security Organisation (Socso), as the state controlled firm seeks to raise cash and revive its ailing fortune.
The company has also proposed a "comprehensive" debt settlement scheme that includes a plan to ask creditors to forgive loans worth RM544mil.
"Upon the completion of the proposed regularisation scheme, the Scheme Creditors will be able to recover partial of their debt as opposed to minimal or zero recovery," Perak Corp said in a filing with Bursa Malaysia today.
Perak Corp has been classified as a Practice Note 17 affected issuer since February this after it defaulted on its loans.
Under the fund raising scheme, Perak Corp has entered into two separate sale and purchase agreement with Socso for the disposal of four plots of commercial land and a plot of residential land in Hulu Kinta for a total of RM78.68mil.
Perak Corp plans to use RM70.8mil of proceeds from the proposed disposals for the repayment of its bank borrowings, while the rest will be set aside as working capital.
Meanwhile, Perak Corp has also announced a scheme of arrangements to settle its outstanding liabilities.
As at end of June, the group's total outstanding liabilities amounted to RM858.37mil.
The creditors includes Affin Islamic Bank Bhd, CIMB Bank Bhd, Affin Bank Bhd,Bank Pembangunan Malaysia Bhd and Malaysia Debt Ventures Bhd.
Perak Corp said it is targeting to raise RM120mil by selling landbanks, including the deals with Socso, to reduce its debts.
It also planned to raise RM100mil by selling Movie Animation Park Studio assets in Hulu Kinta within six months.
Perak Corp said it has proposed to issue 19.9 million redeemable cumulative preference shares A (RPS-A) at an issue price of RM1 each to settle the outstanding amount of RM19.9mil owed to the development financial institutions.
It will also issue up to 50.24 million redeemable cumulative preference shares B (RPS-B) at an issue price of RM1 each.
"The issuance of RPS-A and RPS-B is akin to deferred cash payment to the Scheme Creditors, as redemption of the RPS-A and RPS-B is in three (3) and five (5) years respectively," it said.
The company said the debt settlement plan also include the "proposed debt waiver amounting to RM544.55mil by the Scheme Creditors, representing the balance 63.43% of the Scheme Liabilities," it said.