Photo by: Khee San Food Industries Sdn Bhd (KSFI)
KUALA LUMPUR (July 6): Khee San Bhd has received letters of demand from OCBC Al-Amin Bank Bhd, which is demanding the repayment of RM4.96 million from Khee San and its subsidiary Khee San Food Industries Sdn Bhd (KSFI).
In a Bursa Malaysia filing, the company which makes candies such as the popular Fruitplus Chewy Candy, said the company had on July 3 received the letters issued by Messrs Shook Lin & Bok, who represents its client OCBC Al-Amin Bank.
Of the total OCBC Al-Amin Bank is claiming against KSFI and Khee San, RM722,292.94 was for a shariah concept financing loan IMBT TF-i (Ijarah Muntahiah bi Al-Tamlik term financing-i), while RM4.24 million was for a Trade-i facility inclusive of late payment charges.
The sums are outstanding as at May 31, 2020, and Khee San is KSFI’s guarantor.
The claims today are on top of an outstanding amount of RM73.5 million as at March 31, which Khee San has defaulted on in relation to various facilities from eight banks — including OCBC Bank.
Khee San said the company had originally intended to make repayments for the facilities to the respective creditor banks. However, the funds earmarked for these repayments were then channelled to the then-holding company of the company, London Biscuit Bhd (LBB).
“LBB had been wound up on Jan 13, 2020 with Messrs PriceWaterhouseCoopers Advisory Services Sdn Bhd appointed as a liquidator. The company had since filed a Proof of Debt (POD) to reclaim these monies which are due and payable to the company. The recovery process is currently ongoing,” Khee San added.
Khee San had also intended to restructure the banking facilities through its previously announced corporate exercise encompassing a subscription issue and rights issue. But following the departure of the previous subscriber, Mamee-Double Decker (M) Sdn Bhd, as disclosed by Khee San on June 3, the proposed settlement efforts had lapsed, resulting in Khee San being in this default situation.
Nevertheless, the company said it has continued to hold various discussions with the creditor banks and is currently formulating a new corporate proposal to address the balance outstanding, which is to be determined.
It also affirmed it has sufficient working capital to manage its current operations, as well as payment obligation to its trade creditors.
“The company is of the view that there shall be no significant impact on the business, both financially and operationally with inclusion of the corporate proposal which is currently being formulated. In the meantime, the group shall endeavour to engage with all its creditors for their continuous support,” it added.
Khee San also said its solicitor, Messrs Krish Maniam & Co, is in the midst of finalising proceedings, legal and/or otherwise, against the creditor banks for various alleged breaches, and will make a formal claim against the respective creditor banks.
Khee San reported a net loss of RM76.49 million for the 12 months ended Dec 31, 2019, on a revenue of RM129.35 million. There were no comparative figures, following the change in Khee San's financial year end to Dec 31 from June 30.
Khee San’s share price closed 2.5 sen or 8.47% higher at 32 sen today, bringing a market capitalisation of RM36.61 million.