Silver Bird expects to exit PN17 status by end of 2014

Posted on 13 December 2013 - 05:36am

Premalatha Jayaraman
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SHAH ALAM (Dec 13, 2013): Financially troubled Silver Bird Group Bhd, which received shareholders' nod to rename itself as High-5 Conglomerate Bhd yesterday, expects to complete its financial regularisation exercise by the end of 2014 and exit its status as a Practice Note 17 (PN17) company.
Its turnaround specialist Vincent Chew said it is still waiting for Bursa Malaysia's approval for its financial regularisation plan, but hopes to get it by April next year.
The bread and confectionery maker in October this year announced a regularisation plan involving a proposed 10-into-1 capital reduction and a fund raising exercise comprising a rights issue to remove it from the list of PN17 status companies.
Silver Bird fell into PN17 category on Feb 29, 2012 after its auditors expressed a disclaimer of opinion on the group's audited accounts for the financial year ended Oct 31, 2011 (FY11) and a default in payment by its major subsidiaries.
Chew said the group also hopes to turn its negative gearing to positive cash flow by the middle of next year.
He expects to achieve this goal by further reducing the rate of returned (unsold) bread from 20% currently.
"When we came in, the rate of returned bread was about 30%. We have managed to bring this down to 20%, but we want to reduce (the rate) more. We want to make sure that our breads are available everywhere," he told reporters after the group's EGM here yesterday.
"We are hiring new drivers and educating them on how to deliver the breads," he added.
Chew said Silver Bird is also coming up with new innovative products to improve its efficiency, which is expected to help the group achieve its RM10 million revenue target within six months.
The group narrowed its net loss for the nine months ended July 31, 2013 to RM32.6 million from RM319.9 million a year ago, despite revenue falling by 43% to RM60 million from RM104.3 million.
Chew said Silver Bird's share of the local bread market is between 5% and 6%, while Gardenia commands a leading 60% share.
Meanwhile, he said the purpose of changing its name to High-5 Conglomerate was to expose more of its bread brand name. "This is so that the public would better associate the group's products with the company and this would complement the branding of the company's products."