Sunday 14 Jul 2024
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KUALA LUMPUR (Dec 29): Bintai Kinden Corp Bhd has secured an agreement to settle RM3 million of debt with MBSB Bank Bhd, which will see the bank withdraw a legal suit arising from Bintai Kinden’s default in March this year.

The conditional relief indulgence (CRI) agreement involves a six-month relief period for Optimal Property Management Sdn Bhd (OPM), a 100% subsidiary of Bintai Kinden, with monthly loan repayment of RM500,000.

Bintak Kinden was classified as a Practice Note 17 (PN17) entity on March 28, 2023, after defaulting on a loan repayment to MBSB.

This was attributed to OPM's sole debtor, Kolej Teknologi Islam Melaka Bhd, which reportedly placed an extreme financial strain on Bintai Kinden's financial resources.

According to the statement, OPM had repaid RM3 million to MBSB under the salient terms of the CRI agreement by Friday.

Bintai Kinden has been loss-making for four consecutive quarters starting from the third quarter ended Dec 31, 2022 (3QFY2023).

For the first half ended Sept 30, 2023 (1HFY2024), the group booked a net loss of RM8.77 million or 0.97 sen per share, from RM1.16 million net profit or 0.15 sen per share a year ago, with revenue down 76% to RM16.72 million from RM71.44 million for 1HFY2023, mainly due to weaker engineering segment contributions. It recalled client Tenaga Nasional Bhd terminating 10 contracts due to inability to perform its contract obligations "as a result of its banking facilities being suspended". 

"The group is unable to reliably measure the 'not yet recognised' engineering segment contribution at this juncture," it said when announcing the results previously.

Bintai Kinden managing director and chief executive officer Datuk Tay Chor Han stated that CRI is a cornerstone of the group's strategy to navigate out of PN17 classification.

 “The management team intends to use the next six months to further build our track record with MBSB, and [for the bank] to get to know us better on the business and personal fronts.

“We remain hopeful that by July 2024, an amicable, longer-term solution can be reached with MBSB,” said Tay in a statement.

“More critically is the withdrawal of a legal suit by the bank against OPM and the company, as well as for OPM and the company to withdraw their counterclaim against the bank, with the liberty to file afresh and no order as to cost by Jan 10, 2024.

Effectively, post Jan 10, 2024, there will be no more legal suit against Bintai Kinden by any of its current banking partners, the group said.

“This new-found legal clarity is a vital step in solidifying the group’s financial base, and allows for a more focused approach towards revitalising the company’s business sustainably,” the group added.

At the time of writing on Friday, Bintai Kinden was traded up half a sen or 5.88% at nine sen a share, translating into a market capitalisation of RM84.46 million.

Edited ByAdam Aziz
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