Saving the Chicken... ???

LOL!!!

I just saw this research note from RHB. It's not on Comsa but on MAA.

• X Extending RM100m loan to Comsa Farms Bhd. Comsa Farms Bhd announced that they have accepted a loan of RM100m from Malaysian Assurance Alliance Bhd, a 100%-owned subsdiary of MAA Holdings Bhd.
  X The usage of the RM100m loan. We understand that part of the RM100m loan would be used to redeem a 2000/2005 RM40m Redeemable Unsecured Bond, which was due in 2005. According to Comsa Farms, 80% of the bond is held by MAA, while the remaining 20% is held by Commerce International Merchant Bankers Bhd (CIMB). A certain proportion of the RM100m loan would be used to help Comsa Farm settles some of its existing bank loans to enable MAA to have the first charge on a piece of land that is valued at around RM145-150m.
  We understand that about 10-15% of the remaining loans would be used as working capital for Comsa Farm.
  X Potential risk in its lending operations? It remains to be seen as to whether MAA could salvage its investment of RM32m in Comsa Farms’ 2000-2005 bond by giving a new life line of RM100m to the poultry operator in exchange for a collateral value of around RM145-150m. The loan extended by MAA represents a margin financing of 65-70% of the collateral value. This is the second incident faced by MAA, the first being the Tajo Bhd incident. Tajo was subsequently restructured and renamed as Mithril Bhd with MAA holding a 37% stake in the
  company.
  X Maintain Market Perform. We are turning more cautious on MAA’s investment and lending operations. Indeed, higher provisions for diminution in the value of equity investment was the major factor that has affected both MAA’s life and general insurance business performance in FY12/05. This suggests that there is a need for MAA to pay more attention to its investment and lending operations.

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An insurance company involved in such lending operations?????

Soooooo..... you think the chicken can be saved????