KUALA LUMPUR, Malaysia (July 9): Eka Noodles, a Practice Note 17 (PN17) firm, will be delisted from Bursa Malaysia’s Main Market on July 14, after the market regulator denied the company’s request for an extension to submit its regularisation plan until December 31, 2021. “The corporation will continue to exist after it is delisted, albeit as an unlisted entity. The company can still operate and do business, as well as continue with its corporate restructuring, and its shareholders can still benefit from the company’s performance “In a stock exchange filing today, the rice vermicelli and sago sticks manufacturer and distributor stated.
“However, the stockholders will retain shares that are no longer offered and traded on Bursa Securities,” the statement continued.
The regulator said in a separate filing that there was no reasonable justification for granting the company’s request for more time, given that the company’s regularisation plan was contingent on a scheme of arrangement with creditors that it had yet to finalize, with no guarantee that the company would be able to obtain creditor approval because EKA had not been able to reach an agreement on the stipulations.
“Despite the company’s operational performance in terms of revenue and operating profits, and the additional production lines incurred to increase production capacity despite limited working capital, there is a lack of clarity/certainty of a regularisation plan to address the company’s business and resolve all the problems, financial and otherwise.”
Eka Noodles’ stock has been off the market since May 31 after the regulator turned down its request for extra time to present a revised regularisation plan. It was supposed to be delisted on June 2.
However, on May 28, the company filed an appeal against the delisting, and the outcome was published today.
In August 2016, Eka Noodles was downgraded to PN17 status as its shareholders’ equity fell to less than RM40 million, or less than 25% of its issued capital.
The company, which has been losing money since its fiscal year concluded on December 31, 2014 (FY14), began FY21 with a larger net loss of RM1.22 million for the first quarter ended March 31, compared to RM556,000 in the first quarter of FY20. Higher losses resulted from the recognition of more borrowing interest, which resulted in an increase in finance expenses./n
