 |
March 18, 2008 |
|
|
|
 |
PECD BERHAD: Subsidiary Receives Wind-Up Petition from JB Fast Perembajaya Engineering Sdn Bhd, a wholly-owned subsidiary of Peremba Jaya Holdings Sdn Bhd, which in turn is a 70% owned subsidiary of PECD Bhd, was served with a wind-up petition from JB Fast Construction Sdn. Bhd. on March 12, 2008. The wind-up petition was presented on February 25, 2008, at the High Court of Malaya at Johor Bahru. JB Fast claimed that Perembajaya Engineering owes a sum of MYR299,500.63 with an interest rate of 8% per annum from July 3, 2007. The petition will be heard on May 23, 2008, at the High Court of Malaya at Johor Bahru. * Circumstances leading to the filing of Petition: -- Perembajaya Engineering was engaged by Peremba Jaya for engineering works at the Precinct 11 Project in Putrajaya. JB Fast had provided services to Peremba Jaya with regard to Phase 2 of the Project; -- Peremba Jaya and its subsidiaries are still currently in negotiations for the final settlement of the Project. The protracted negotiations have resulted in a difficult cash flow position for Peremba Jaya and its subsidiaries; -- Peremba Jaya had on July 10, 2007, received a notice of demand pursuant to Section 218 of the Companies Act, 1965, dated July 6, 2007, from JB Fast in respect of the Claim Amount, which was served at Peremba Jaya's registered address; -- Subsequent to that, several discussions took place for the settlement of the amount between Peremba Jaya and JB Fast whereby a schedule of payments were agreed upon. Payments were made between July to November 2007. This has resulted in a reduction in the Claims amount. -- The wind-Up petition was presented when further payments were not made. * Financial and operational impact of the wind-up proceedings on the Group The wind-up petition is not expected to have any major impact on the operations of the Group. As a result of the wind-up, and should the wind-up be carried out, the assets of Peremba Jaya may need to be written down to their current recoverable amounts and additional provisions to be made for costs associated with the winding-up proceedings which is not expected to be material. It is expected that the financial impact of the wind-up will be minimal and will not cause any significant differences from the recently released financial results. About PECD Berhad PECD Berhad is engaged in investment holding and provision of management services. The company operates in four business segments: construction, EPCC oil and gas, property development and others. Its wholly owned subsidiaries include Peremba Construction Sdn. Bhd., which is engaged in general construction and investment holding and Wong Heng Engineering Sdn. Bhd., which is engaged in investment holding and engineering, procurement, construction and commissioning emphasizing in the oil and gas, as well as the power sectors. PECD Berhad's 70%- owned subsidiary is Peremba Jaya Holdings Sdn. Bhd., which is engaged in property development, construction and investment holding. Malaysian Rating Corp. Bhd has downgraded PECD Berhad's MYR200-million serial fixed rate bonds to BB+ from BBB-. The rating outlook remains negative. The downgrade reflects the major operational and strategic challenges currently faced by PECD as well as continued deterioration in its credit metrics, and recognizes the increased execution challenges confronting management as it pursues its turnaround strategy. The Troubled Company Reporter-Asia Pacific reported on March 7, 2008, that the company was classified as an Affected Listed Issuer under Practice Note No. 17/2005 of the Listing Requirements of Bursa Malaysia Securities Berhad, since the company's shareholders' equity deficit reached MYR914.9 million as at December 31, 2007. |
|
|
||
|
Today's Top Stories have been selected from the Troubled Company Reporter - Asia Pacific. To receive the Full TCR-AP please CLICK HERE.
