KUALA LUMPUR (Aug 4): Jiankun International Bhd (KL:JIANKUN) plans to issue shares to settle RM8.24 million in outstanding debt, which will result in the emergence of a new largest shareholder.

In a bourse filing on Monday, the loss-making property developer and builder also announced a share capital reduction exercise to wipe out accumulated losses, and expand into building material and machinery trading to diversify its revenue base.

The debt settlement exercise involves Jiankun issuing 274.5 million shares at three sen apiece to respective creditors to settle RM8.24 million in outstanding debt owed to various subcontractors and corporate services providers (share registrar and company secretarial services).

The bulk of the debt, RM7.61 million, is owed to subcontractor Crimson Power Sdn Bhd. A total of 253.76 million shares, equivalent to 30.13% of Jiankun’s enlarged share base, are to be issued to Crimson Power.

This will make Crimson Power the largest shareholder of Jiankun. According to the company, it currently has no substantial shareholders.
 
Crimson Power is 46.5%-owned by Tan Kian Soon, followed by Yong Kok Leong with 37.5%, and Lim Cheng Seng, Oh Huoy Jiuan, Sylvester Ng Yew Sai and Wong Choon Loy with a 4% stake each.
 
Meanwhile, Jiankun proposed a share capital reduction of up to RM61.3 million to overturn its accumulated losses of RM51.37 million as at end-March. The exercise is projected to trim the company’s share capital to RM46.53 million and result in retained earnings of RM9.93 million.

As for its proposed entry into building material and machinery trading, Jiankun said this is aimed at diversifying the company’s revenue base, given that its property development and construction activities contributed to over 99% of its revenue over the past financial years.

Jiankun noted the company secured its first order to supply generators valued at RM310,000 in January and has since begun receiving increasing orders from customers in the construction industry.

It noted that for the nine-month period ended March 31, 2025, the trading business contributed 87% of its total revenue. Jiankun posted a net loss of RM656,000 on a revenue of RM5.12 million for the period.

“With the positive results derived from the trading business, the group intends to further develop and expand its trading business by leveraging its existing presence in the property development and construction industry as well as the expertise and business networks of its key management personnel,” it added.

Shares in Jiankun ended unchanged at three sen, valuing the company at RM17.03 million.