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Its latest proposals for a par value reduction and rights issue to
raise funds may not be sufficient to keep the company afloat, and could
see it plunging into PN17 status in the future.
Accordingly, the amount raised from the rights issue following the repayment of outstanding debts, is simply too small to sustain any income generating business activities.
On July 18 2014, the company currently rated PN1 for defaulting on its debts, proposed par value reduction and rights issue.
It is within a whisker of slipping into PN17 or financial distress and the par value reduction is meant to help it ward off the unwanted status. One of the PN17 status company is when it has insignificant business or its revenue for the financial year falls below 5% of its paid up capital. Another criterion is when its shareholders’ fund is equal or less thna 25% of its paid up capital.
By reducing paid capital, it bring the benchmark amount for the PN17 lower, making it easier for the company to stay above PN17.
MPCB has proposed to halve the par value of each exisiting share of rm1 to 50 sen. As at the date of the proposal, MPCB’s paid up capital was rm288 million. Following the par value reduction, the amount will be halved to rm144 million. To keep it from falling into PN17 status, it would only need to make 5% of that or rm7.19 million for the current financial year.
However it is still making losses and nobody is going to buy Wisma MPL ot its land in JB. It might escpae PN17 time time but what will it do in 2015.
Most of its revenue is mainly from rental of Wisma MPL. Revenue from rental income had decreased from rm3.36 million previosuly due to loss on income from its car park collection. The company has no other substantial source of income at the moment (July 2014).
Part of the proceeds of its proposed rights issue of shares with free warrants is to pay off its creditors, the largest being Amanah Raya Development Sdn Bhd. In March 2014, MPC Corp has agreed to pay AmanahRaya rm120 million cash to settle a court judgement airsing from the JV. Of the amount, rm115 million still needs to be settled and the company has until Sept 2014 to do so.
The rights issue at minimum subscritoion will raise rm142 million. The company also needs to use the proceeds to repay its largest shareholder, Top Lander Offshore Ltd, and outstanding borrowings with RHB Bank. Given minimum subscription, rm14 million of the proceeds will go to Top Lander.
Another rm10 million will go to RHB to help settle its outstanding borrowings. As at July 2014, MPCB owed RHB a total of rm106 million. Expenses airsing from the exercise are estimated at rm2 million which leaves just rm709000 for working capital.
Moreover to refurbish Wisma MPL takes millions and MPCB is already find it hard to find partners to develop its landbank.
It is worth nothing that businessman Tey Por Yee emerged as the company with a 5.21% stake.
Accordingly, the amount raised from the rights issue following the repayment of outstanding debts, is simply too small to sustain any income generating business activities.
On July 18 2014, the company currently rated PN1 for defaulting on its debts, proposed par value reduction and rights issue.
It is within a whisker of slipping into PN17 or financial distress and the par value reduction is meant to help it ward off the unwanted status. One of the PN17 status company is when it has insignificant business or its revenue for the financial year falls below 5% of its paid up capital. Another criterion is when its shareholders’ fund is equal or less thna 25% of its paid up capital.
By reducing paid capital, it bring the benchmark amount for the PN17 lower, making it easier for the company to stay above PN17.
MPCB has proposed to halve the par value of each exisiting share of rm1 to 50 sen. As at the date of the proposal, MPCB’s paid up capital was rm288 million. Following the par value reduction, the amount will be halved to rm144 million. To keep it from falling into PN17 status, it would only need to make 5% of that or rm7.19 million for the current financial year.
However it is still making losses and nobody is going to buy Wisma MPL ot its land in JB. It might escpae PN17 time time but what will it do in 2015.
Most of its revenue is mainly from rental of Wisma MPL. Revenue from rental income had decreased from rm3.36 million previosuly due to loss on income from its car park collection. The company has no other substantial source of income at the moment (July 2014).
Part of the proceeds of its proposed rights issue of shares with free warrants is to pay off its creditors, the largest being Amanah Raya Development Sdn Bhd. In March 2014, MPC Corp has agreed to pay AmanahRaya rm120 million cash to settle a court judgement airsing from the JV. Of the amount, rm115 million still needs to be settled and the company has until Sept 2014 to do so.
The rights issue at minimum subscritoion will raise rm142 million. The company also needs to use the proceeds to repay its largest shareholder, Top Lander Offshore Ltd, and outstanding borrowings with RHB Bank. Given minimum subscription, rm14 million of the proceeds will go to Top Lander.
Another rm10 million will go to RHB to help settle its outstanding borrowings. As at July 2014, MPCB owed RHB a total of rm106 million. Expenses airsing from the exercise are estimated at rm2 million which leaves just rm709000 for working capital.
Moreover to refurbish Wisma MPL takes millions and MPCB is already find it hard to find partners to develop its landbank.
It is worth nothing that businessman Tey Por Yee emerged as the company with a 5.21% stake.
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