KUALA LUMPUR (July 14): Tecnic Group Bhd, which completed the disposal of its entire business to sister company SKP Resources Bhd for RM200 million this year, is now officially a Practice Note 16 or cash company under Bursa Malaysia’s listing requirements.

In a filing today, Tecnic said pursuant to the disposal of its entire equity interests in Plastictecnic (M) Sdn Bhd, Sun Tong Seng Mould-Tech Sdn Bhd and Bangi Plastics Sdn Bhd – for which it received the final outstanding amount of RM9.43 million on July 8 – it has received a letter from Bursa Securities dated today (July 14) notifying Tecnic that it is now a cash company.

“In this respect, the company must strictly comply with the provision and requirements in Paragraph 8.03 and Practice Note 16 (PN16) of the Listing Requirements,” it said.

As such, Tecnic must regularise its condition by submitting a proposal to acquire a new core business to the Securities Commission Malaysia (SC) within 12 months from the date of the notice.

It must also place at least 90% of the cash and cash equivalent in an account opened with a financial institution licensed by Bank Negara Malaysia and operated by a custodian. 

It is not allowed to withdraw the money except to implement proposals to acquire a new core business approved by the SC or for pro-rata distributions to shareholders.

“The board is taking the necessary actions to formulate a plan to regularise the financial condition of the company. Any progress in this regard shall be announced to Bursa Securities in due course,” it added.
 
As at March 31, 2015, Tecnic’s cash and bank balances stood at RM18.8 million, while trade and other receivables stood at RM211.9 million, bringing its total assets to RM230.7 million.

Tecnic’s (fundamental: 1.95; valuation: 3) shares ended the day at 74.5 sen, down half sen or 0.67%, for a market capitalisation of RM30.1 million. 

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers.)