Thursday 28 Sep 2023
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KUALA LUMPUR: Loss-making Green Ocean Corp Bhd expects to turn itself around with a capital injection from its managing director (MD) Datuk Frankie Tan See Meng.

Tan has injected more than RM10.6 million into the group in the past one year.

The lack of capital is the major hindrance to Green Ocean’s recovery.

“I have to back it up to help ‘bring back’ the company, to let the banks provide some [credit] line to Green Ocean, and eventually let it be independent and run by itself,” Tan told reporters after the company’s annual general meeting yesterday.

As at June 30, its current liabilities exceeded current assets by RM6.61 million, resulting in a negative working capital ratio of 0.27 times.

“When I stepped into the company, I was prepared to do something about it. Though I can’t promise when [to turn around Green Ocean], I will do my best,” said Tan, who was redesignated from executive director to MD of the group on Dec 27 last year. He owns a majority 15.38% stake in the group.

All resolutions were passed in yesterday’s meeting, including the related-party transactions (RPTs) involving Sawit Raya Sdn Bhd of which Tan is also a director and a major shareholder.

The RPTs involve Green Ocean purchasing RM250 million of palm kernel from Sawit Raya for raw materials for palm kernel crushing production, and RM130 million of crude palm kernel oil, palm kernel expeller, refined palm oil and by-products and soft oils. This also includes Green Ocean selling back the crude palm kernel oil, palm kernel expeller, refined palm oil and by-products and soft oils to Sawit Raya for RM120 million, and provision of tolling services for RM1.8 million.

Tan is confident that Green Ocean is able to sell the feedstock it purchased from Sawit Raya after processing them.

“We (Green Ocean) can sell the [feed stocks], no problem. We can sell it independently to our existing buyers, and do not have to sell it back to me (Sawit Raya),” he said.

Tan dismissed any plans to list Sawit Raya or to use Green Ocean as a vehicle for a backdoor listing, despite Sawit Raya having met the profit threshold to list on the Main Market of Bursa Malaysia.

Green Ocean has been loss-making in the past two financial years.

For the first quarter ended June 30, 2014, its net loss narrowed to RM591,000 from RM1.33 million a year ago. Revenue was higher at RM8.14 million compared with RM6.6 million due to higher production of palm kernel crushing activities.

Tan said Green Ocean will stick with its palm-oil-related business and does not have plans to diversify into any other businesses.

Green Ocean has seen changes in its board room in the past one year, with the resignation of non-executive director Lee Byoung Jin (previously MD) and deputy chairman Datuk Lee Say Tshin.

Green Ocean closed down one sen or 5.26% to 18 sen yesterday, giving it a market capitalisation of RM48.72 million.

This article first appeared in The Edge Financial Daily, on September 30, 2014.

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