Tuesday, November 02, 2010

Vastakux Debt Rescue Runs Into Trouble!

Blogged earlier this year:

  1. 26 Jan 2010: More 'Bad News' For Vastalux
  2. 9 Dec 2009: Vastalux Vice Chairman Keeps Dumping His Shares!!
  3. 1 Dec 2009: A Look At Vastalux Energy

From 1 Dec 2009 posting: A Look At Vastalux Energy

Last night, Vastalux reported its earnings. It had some 17.727 million in losses!

Yeah, the stock is crashing down today for a good reason!

And in its books, its trade receivables were massive.

Amount due from customers = 163.052 million!!!!!

What is happening? Compared to its quarterly revenue and earnings (see earnings snapshot from DJ below), why is the receivables so high?

And this is what the company had to say in its notes.


Company was just listed in Sept 2008 and now it runs into all kinds of trouble.

From 9 December 2009 posting: Vastalux Vice Chairman Keeps Dumping His Shares!!

  • In the latest announcement on Dec 8, he sold another 13 million shares for 16.5 sen each in the open market on Dec 3.

    The previous day on Dec 2, he had also disposed of 13 million shares in the open market.

    The latest disposal reduced his total shareholding to 14% or 28.94 million shares.

    Vastalux has been under the spotlight after it resubmitted its results. It
    reported net losses of RM17.72 million in 3Q ended Sept 30, compared with net profit of RM7.25 million a year ago.

    Of concern to investors are the amounts RM163 million owed by customers and trade receivables of RM69.7 million.

    Revenue was RM32.13 million which was sharply below its cost of sales of RM51.42 million.

This certainly is not sounding good. Not when the company has balance sheet issue and not when the earnings performance from the company has been extremely dismal!

Vastalux closed yesterday ( Decemeber 2009) at 0.185!

From 26 Jan 2010 posting: More 'Bad News' For Vastalux

    In 2008, Vastalux sold shares to investors at 75 sen each and was listed on the exchange in September that year. The stock was last traded at 21 sen yesterday.

    For the nine months ended Sept 30, Vastalux reported a consolidated pre-tax loss of RM22.2mil.
    This was due to the sharp RM17.7mil loss reported in the third quarter, largely blamed on cost overrun.

    Apart from the weaker operating performance, MARC said the group’s “significant” unbilled completed works. Vastalux’s trade receivables rose to RM232.8mil as at end of September, compared with RM157.7mil in revenue recorded during the same period.
It's now 2nd Novemeber 2010. On the Edge, Vastalux faces setback in restructuring debts

  • Vastalux faces setback in restructuring debts
    Written by Isabelle Francis
    Tuesday, 02 November 2010 12:27

    KUALA LUMPUR: Vastalux Energy Bhd is partially through its debt restructuring scheme after one of its two group of creditors adjourned its meeting with the company.

    The company told Bursa Malaysia yesterday that it had successfully carried out its meeting with its Creditors Class 1 but its meeting with its Creditors Class 2 was adjourned by another month.

    Earlier this year, Vastalux proposed a debt restructuring exercise involving the two group of creditors and amount owed to the creditors worth some RM174.4 million.

    In the proposal, the company sought a waiver for the RM50.29 million owed to Creditors Class 1. (WOW! A waiver? And it's not just a waiver! It's a 50.29 million waiver! )

    Meanwhile, it proposed that the amount owed to Creditors Class 2 to be settled via the issuance of Redeemable Cumulative Unsecured Loan Stocks (RCULS).

    The amount owed to Creditors Class 2 is RM124.1 million, and was proposed to be settled via the issuance of 248.22 million one-year RCULS worth RM62.05 million or 25 sen each at a coupon rate of 3% per annum.

    The company requested the balance outstanding amounting to RM62.05 million to be waived. (WOW! Holy cow! Another waiver of 62.05 million?)

    However, yesterday, Vastalux said the meeting with Creditors Class 2 was adjourned for 30 days to allow it to work on a ‘modification’ to the debt restructuring exercise.

    The company said since the proposed debt restructuring for the creditors was not interconditional, it would proceed with the proposed exercise with Creditors Class 1.

    Vastalux has been put under the spotlight for the wrong reasons of late and suffered a big blow when its licence as a full-scale main contractor to Petroliam Nasional Bhd (Petronas) was suspended in January this year.

    Just last month it was reprimanded by Bursa Malaysia for failing to make an immediate announcement of the following winding-up petitions served on Vastalux Sdn Bhd (VSB). VSB is a major subsidiary and contributes 99.96% of the company’s total assets on a consolidated basis as at Dec 31, 2009.

    Vastalux widened its losses in the second quarter ended June 30, 2010 to RM7.22 million from RM1.65 million a year ago. Revenue fell to RM5.86 million from RM67.07 million.

    Vastalux in its 2QFY10 notes said it will face bigger challenges this year due to the suspension of its Petronas licence, resulting in its inability to bid for new Petronas jobs.

Holy cow!

The amount of waivers sought.... is truly.... err.... mind boggling!

Like this also can?


No wonder Vastalux is facing setbacks in its debts restructuring!