KUALA LUMPUR (Oct 30): Bintai Kinden Corp Bhd (KL:BINTAI) said Universiti Islam Melaka Bhd (UIMB) has committed to a structured repayment plan amounting to RM13.5 million to be paid to Bintai Kinden's wholly owned subsidiary Optimal Property Management Sdn Bhd (OPM) under an extended interim settlement proposal (EISP) agreement.

In a statement on Wednesday, the mechanical and electrical engineering services specialist, medical device manufacturer and facilities operator said the payment schedule is spread over 21 instalments, with UIMB, a wholly owned subsidiary of the Melaka state government, committing to a minimum payment of RM5.2 million over the first four months starting from Oct 31.

"The final payment date for all arrears is set for July 15, 2026, should the parties fail to agree on a restructured availability charge rate by March 31, 2026. As of Oct 29, 2024, the arrears amount stood at RM64.02 million," it added.

In a separate filing with Bursa Malaysia, Bintai Kinden said OPM had on Wednesday received a confirmation and agreement letter from UIMB.

The EISP agreement follows a series of negotiations and announcements made between the parties on Dec 29, 2023, Jan 29, 2024, April 17, 2024, and May 31, 2024, during which OPM and UIMB initially explored a potential acquisition of OPM by UIMB. However, this acquisition proposal was called off due to differences in valuation.

On Oct 30, UIMB confirmed its request for the EISP, extending the ISP initially granted on Jan 29.

“We are greatly encouraged by UIMB’s commitment under the EISP to repay OPM with a clear and structured payment schedule. This committed minimum monthly payment plan will not only provide positive cash flow to the company, but also significantly enhance our financial stability in the coming years. The structured repayments offer a reliable pathway for resolving outstanding amounts and allow both parties the necessary time to finalise terms that align with our mutual interests. This agreement ensures the operational continuity of the student accommodations managed by OPM, while also strengthening our overall financial position and supporting our efforts to uplift from Practice Note 17 (PN17) status,” Bintai Kinden managing director and chief executive officer Datuk Tay Chor Han said.

Bintai Kinden slipped into PN17 status in March 2023 due to financial challenges, mainly caused by the default of payments by UIMB. The company had submitted the proposed regularisation plan to Bursa Securities on Oct 4.

"The company remains focused on implementing its regularisation plan to address financial conditions, and agreements such as the EISP reflect its commitment to resolving outstanding issues and stabilising its financial position. Bintai Kinden remains dedicated to pursuing strategic measures that will contribute positively towards the company’s recovery and long-term growth," added Tay.

Bintai Kinden shares closed up one sen or 11.76% at 9.5 sen on Wednesday, giving it a market capitalisation of RM109.46 million. The stock has risen 5.56% so far this year.