KUALA LUMPUR (Aug 7): TXCD Bhd (KL:TXCD) has withdrawn its proposed regularisation plan after regulators said its proposal to transfer its listing to a new company while carving out its construction business amounted to a significant change in business direction under the Securities Commission Malaysia's Equity Guidelines.
In a Bursa Malaysia filing on Friday, the PN17 company said it voluntarily withdrew the application submitted in March following regulatory feedback. It has applied for a six-month extension until Feb 7, 2027 to submit a revised regularisation plan.
The original proposal, announced on March 26, would have seen TXCD transfer its Main Market listing to newly incorporated dormant company, RCV Bhd, with shareholders exchanging their TXCD shares and irredeemable convertible preference shares (ICPS) for RCV securities on a one-for-one basis.
RCV would then become the listed company and take over TXCD's construction unit, Ageson Kensetsu Sdn Bhd (AKSB), while TXCD and its dormant subsidiaries would be sold for RM1 and wound up.
As of March 11, AKSB had secured 17 construction contracts worth RM500.66 million, with an outstanding order book of RM323.66 million to be recognised over the next three years.
TXCD said the restructuring was intended to separate its construction business from legacy assets and liabilities that led to its Practice Note 17 status, allowing the group to focus on construction under AKSB.
However, regulators said the proposed transfer of the listing status to RCV and the inclusion of AKSB under the new listed entity constituted a significant change in the company's business direction, triggering the Securities Commission's Equity Guidelines.
TXCD said it will revise the plan to comply with the guidelines and announce the new proposal once it is finalised.
The turnaround is led by managing director and major shareholder Chew Swe Siew, who owns a 22.03% stake in TXCD and 38.06% of its outstanding ICPS.
TXCD was classified as a PN17 company on Oct 31, 2023 after its then external auditor Jamal, Amin & Partners issued a disclaimer of opinion on its audited financial statements for the 18-month financial period ended Dec 31, 2022.
The group later triggered an additional PN17 criterion after its shareholders’ equity fell to RM2.38 million as at Sept 30, 2024, equivalent to just 0.98% of its share capital, while accumulated losses widened to RM279.5 million.
Its subsequent external auditor LTTH PLT also issued a disclaimer of opinion on TXCD’s audited accounts for the 18-month period ended June 30, 2024.
Shares in TXCD closed down half a sen or 3.2% at 15 sen on Friday, valuing the company at about RM46.7 million.
Read also:
PN17 firm TXCD secures RM57.1 mil contracts from Sg Besi Construction
PN17 TXCD gets RM119.1 mil in construction subcontracts from Vestland
Bursa reprimands TXCD, fines five former directors for late annual report, governance failures
TXCD bags fresh construction contract in Sepang after previous deal scrapped