Hytex seeks to exit PN17 status

by **Cals** Mon 30 Dec 2013, 00:13

Published: Saturday December 28, 2013 MYT 12:00:00 AM
Updated: Saturday December 28, 2013 MYT 9:12:21 AM
Hytex seeks to exit PN17 status
BY WONG WEI-SHEN

KUALA LUMPUR: The board of apparel manufacturer Hytex Integrated Bhd is laying all options on the table for the restructuring of the financially troubled company, which was placed under Practice Note 17 status in June after auditors cast doubts over its ability to continue as a going concern.
It was also placed under Practice Note 1 in August 2011 after defaulting in payments of interest in respect of loan stocks.
The company’s executive director Tan Joon Wei told reporters following a shareholders meeting where armed guards were seen that among the options being considered were joint ventures and reviving its original equipment manufacturer (OEM) business. Another option would be to dispose off inventory, which stood at RM69.7mil as of the second quarter ended Sept 30, to raise cash.
Tan said there were now committed shareholders to revive the business and that there would be a meeting with potential business partners on Monday.
The meeting was held to remove executive chairman Sau Kim Hing @ Soo Kim Sinand managing director Saw Kam Fock @ Saw Kim Hock. Sau, the founder of the business, together with Saw and other family members were longtime majority shareholders in Hytex via their investment vehicle Precious Continent Sdn Bhd.
The EGM concluded without incident with Sau and Saw, whose investment vehicle Precious Continent sold off all its shares in the company in two transactions earlier in the year, not resisting the resolutions called by Savannah Leaders Sdn Bhd andNutox Ltd to remove them. Savannah Leaders and Nutox collectively hold around 20% of Hytex.
Notably, this was the second time Nutox had given notice to remove Sau and Saw. Earlier in August, Nutox together with PT Nusantara Rising Rich posted a special notice to remove them but withdrew it two days later without any explanation. This resolution also called for the removal of two other board members – Chiew Wei Meng and Hoo Kok How – who both resigned on Nov 29.
More than 50% of the company’s shareholders attended the meeting, and the removal of the two board members were approved unanimously. Tan said that the company, which had its own concept stores under the American Athletics, World of Cartoons, Issue and Hytex Studios brands, may look to the lower end of the retail-clothing business such as supplying to Tesco or Kmart. The trading arm contributes up to 90% of revenue with the OEM arm contributing the remainder.
The High Court has granted Hytex a 90-day restraining order against the winding up of the company, valid from Dec 20 to March 19, 2014.
“We are now putting in the teams to look at the whole operation and see what we need to do,” Tan added.