My Dearest Moo Moo Cow,
Have a look at this announcement, ANNOUNCEMENT PURSUANT TO PRACTICE NOTE 1/2001
- In accordance with PN 1/2001, Megan Media Holdings Berhad ("MMHB or "the Company") wishes to announce that its subsidiaries, Memory Tech Sdn Bhd ("MTSB") and MJC (Singapore) Pte Ltd ("MJC"), have defaulted on maturing trade facilities amounting to RM47,362,332.46.
Introduction
On 27 April 2007, MTSB and MJC ("the Borrowers") were unable to meet these debt obligations and by 30th April 2007, it was established that further impending maturities are also unlikely to be paid.
1. Reason for default.
MTSB and MJC are experiencing financial difficulties as a result of constraints on its current cash flow from its operations which are insufficient to service and repay amounts due to lenders. Principally, this has been due to an exceptional build-up of its trade debtors.
2. Measures taken to address the default.
The Company has appointed a suitably qualified Deputy CEO and specialist advisory team to support an investigation into the underlying causes of default and, if necessary, to formulate and initiate a comprehensive debt restructuring process. This will likely entail meetings with regulatory authorities, lending institutions, rating agencies, trustees and other relevant parties as well as appointment of an appropriate investment bank, accounting and legal firms to facilitate the due process.
3. Financial and legal implications in respect of the default in the payments.
These defaults are only just unfolding and the lenders have not called an event of default. The company will be advising all Lending Institutions on the current situation and the proposed course of action.
4. In the event the default is in respect of secured loan stocks or bonds, the lines of action available to guarantors or security holders against the listed issuer.
Not applicable.
5. In the event the default is in respect of payments under a debenture, to specify whether the default will empower the debenture holder to appoint a receiver or a receiver and manager.
Not applicable.
6. Whether the default in payment constitutes an event of default under a different agreement for indebtedness (cross default and the details thereon, where applicable).
The defaults could constitute a technical default on banking facilities granted by other lenders to the Group. This is presently being assessed by the Company in consultation with their lawyers.
7. Declaration of Solvency
Based on standard accounting principles and practices, the Company remains in a state of solvency. However, the Company shall consult its auditors for further inputs prior to providing a Solvency Declaration within 3 business days from the date of this announcement. At this early stage of enquiry and investigation, it is difficult to be conclusive on this issue.
By order of the Board
This announcement is dated 4 May 2007.
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4 comments:
Hi Moola,
Looks like Megan's dispute with their ex-bankers may worsen from here.
Hi Moola,
Looks like Megan's dire straits, partially caused by their ex-bankers may worsen from here.
My Dearest Jomaropal,
At this moment of time, Megan simply does not look good at all. And that's the kindest way I can put it.
Amount defaulted is some 47 million.
The company has a obligation to pay such debts in regardless.
By failing to meet its obligation to pay these debt,it cast a huge shadow of doubt over the company's financial health.
And when one puts into consideration that Megan has some total debts of over 880 million, this issue is deadly serious in my opinion.
Btw sorry that my blogs are on moderated comments. It's a really a pain but I have this feature installed because it provides me control over the occassional spam and other nonsense.
rgds
no problem Moola, I kept posting again and again because I did not realise that it was moderated. I thought what's going on, I kept keying in the wrong word verification hah.
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