Ivory Properties’ subsidiary default on RM39m repayments

The group is now seeking the bank’s indulgence to consider the extension of time for the commencement of principal repayment

by S BIRRUNTHA / Pic source from http://ivory.com.my/

IVORY Properties Group Bhd, which fell into the Practice Note 17 (PN17) category recently, announced that its wholly owned subsidiary, Ivory Meadows Sdn Bhd, had defaulted in principal repayment to Malayan Banking Bhd (Maybank) amounting to RM39 million.

In a filing to Bursa Malaysia yesterday, the property developer said the financing facility was raised to part finance land acquisition.  

The group added that following the delay in the project’s launching caused by the impact of the Covid-19 pandemic, Ivory Meadows could not meet its payment obligation without the cashflow supposedly generated from the project’s sale proceeds.  

It said the group’s support for Ivory Meadows was also affected due to limited available cash, which was used to sustain the group’s operations and defray overhead.

Nevertheless, Ivory Properties noted that since the day of the group’s first announcement pursuant to PN17 of the listing requirements, the group has actively engaged with all financiers to make representations and vigorously pursue mutually acceptable solutions.

“The group, together with Ivory Meadows, is seeking Maybank’s indulgence to consider the extension of time for the commencement of principal repayment and thus allow Ivory Meadows sufficient time to launch the project to generate cashflow.  

“The extra time will also enable the group to complete its proposed capital raising exercise, wherein part of the proceeds can be used to regularise the default in payment,” it said.

In the event of default in payment according to the terms and conditions contained in the facility agreement, the group said Maybank has the right to proceed with necessary processes provided under the agreement to recover the outstanding debts, including legal proceedings against Ivory Meadows and the corporate guarantor to enforce the securities documents created under the facility agreement.

However, the group said it did not receive notices of demand nor notices of default from the financier as of yesterday.

“Hence, there is no legal implication at this stage.

“The financing facility is secured against, among others, the project land of Ivory Meadows and corporate guarantee of the company,” it noted.

Ivory Properties also said there will not be any significant impact on the business, both financially and operationally, with the inclusion of the proposed capital raising exercise which is currently being formulated.  

In the meantime, the group will endeavour to engage with the financier for their continuous support.

“The group is solvent as at Sept 27, 2022, and is able to pay all its debt as and when they fall due within the period of 12 months from Sept 27, 2022, pursuant to Paragraph 9.19A (4) of the listing requirements.

“Accordingly, the group will provide the solvency declaration to Bursa Securities within three market days from the date of this announcement,” it added.

Shares of Ivory Properties closed half a sen or 6.67% lower at seven sen yesterday, giving it a market capitalisation of RM34.31 million.