KUALA LUMPUR (Nov 1): Maxland Bhd (KL:MAXLAND), formerly known as Priceworth International Bhd, has outlined two steps to address its financial pressures following an auditor’s warning over “material uncertainty” flagged by its auditors in its latest financial statements, which may “cast significant doubt” on the Sabah-based timber firm’s ability to continue as a going concern.
According to its Bursa Malaysia filing, Maxland said the group is now negotiating to restructure its debts and waiting for a High Court decision on a key liability.
As per the auditor’s report, Maxland incurred a net loss of RM61.2 million for the financial period ended June 30, 2024, alongside a gross loss of RM31.5 million.
The auditors highlighted that Maxland’s current liabilities exceeded its current assets by RM69.8 million, a shortfall primarily attributed to two significant obligations amounting to RM80 million owed to third-party creditors.
In response, Maxland’s board has outlined two specific mitigation efforts aimed at stabilizing its financial position.
The first liability centres on the RM59 million unsecured trade advance extended to its wholly-owned subsidiary Sinora Sdn Bhd in 2017.
“The management has been in the midst of a negotiation process with the creditor actively to reach an amicable solution to restructure the said outstanding sum. The management is confident that the creditor will not enforce the repayment of the amounts within the next 12 months,” said Maxland.
The second liability involves a RM20.6 million provision covering replanting costs, interest, and legal fees, stemming from an arbitration ruling against two subsidiaries, GSR Pte Ltd and Sinora Sdn Bhd.
In particular, the final award involving GSR and Transkripsi Pintar Sdn Bhd, is currently under appeal in the High Court.
“The management is constantly in discussion with the parties concerned and will only negotiate for a settlement arrangement after the High Court has decided on the matter,” said Maxland.
Maxland’s shares were unchanged at five sen on Friday, giving it a market capitalisation of RM80 million.
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