Bina Goodyear aims to exit PN17 by end-2014

Bina Goodyear aims to exit PN17 by end-2014
Posted on 1 January 2014 - 05:39am
Ee Ann Nee
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KUALA LUMPUR (Jan 1, 2014): Bina Goodyear Bhd, which hopes to return to the black in 2014, aims to exit its Practice Note 17 (PN17) status by year end (end of 2014) on the back of its regularisation plan.

"We are targeting 2014-2015 to get back in to the black, which we need to, in order to get out of PN17. The requirement is two consecutive quarters of profit," its executive director Eng Kim Leng told reporters after the company's AGM here yesterday.

Bina Goodyear has been registering losses for the past five years since the financial year ended June 30, 2009. It has been a PN17 company since Nov 19, 2012.

Managing director Moo Hean Chong said the company is still finalising its regularisation plan to address its PN17 status and intends to submit it by early February 2014 to Bursa Malaysia Bhd for approval.

Bina Goodyear has until March 17, 2014 to submit a regularisation plan to the regulator.

"We're confident of the (regularisation) plan as per our announcements," said Moo, who is optimistic of obtaining Bursa Malaysia's approval.

The proposed restructuring scheme involves a proposed capital restructuring, proposed renounceable rights issue of up to 254.39 million new shares, proposed offer for subscription of up to 48.28 million new shares, proposed private placement of 50 million new shares and proposed scheme of arrangement.

It also includes the proposed acquisition of the construction business of Astinas Construction & Development Sdn Bhd (ACD) for RM10 million cash and proposed acquisition of 28% interest in Ontime Privilege Sdn Bhd (OPSB) together with the assignment of advances of the vendors to Bina Goodyear for RM9.62 million to be satisfied via the issuance of 96.28 million new Bina Goodyear shares.

Bina Goodyear had on Dec 4, 2013 entered into a business acquisition agreement with ACD for the proposed acquisition of the construction projects amounting to an order book of RM250 million. The purchase price of RM10 million is to be financed by the funds to be raised in to the proposed regularisation plan.

The RM250 million order book will be able to last it for two years, with projects predominantly in Johor.

"The RM250 million order book is a start and we'll proceed from there and get additional contracts. We'll keep replenishing the order book," said Moo.

He said construction remains a mainstay of the company, even though it is acquiring a 28% stake in OPSB, a property development company.

Eng said once the company is in a good financial position, it can bid for more projects, as its difficulty lies in its current balance sheet.

"We'll start bidding right away once we're in a financial position to do so. If you look at our track record, our projects were fairly prestigious, including the Palace of Justice, Subang Parade, Shah Alam mosque, various buildings in KL Sentral and Mont Kiara," said Eng, adding that the company's focus is in Klang Valley and Johor.

He added that Bina Goodyear, with its strength in high-rise construction, will opt for projects with a minimum of "a few hundred million", as anything with an order book of under RM300 million is considered small.