Kinsteel Bhd hopes to secure the indulgence from the holders of its outstanding debt notes of RM40mil, due on 28 Aug 2013 if there is any delay in the redemption, as it undertakes its proposed private placement exercise to raise RM29mil.
The Murabahah commercial papers/medium term notes programme would expire on 28 Aug 2013 and the outstanding RM40mil Murabahah CPs are due and payable on the same date.
Should there be any failure in the redemption, Kinsteel shall seek indulgence from the Murabahah CPs holder to avoid a declaration of an event of default.
It was exploring options with financial institutions to address the overall financing structure of group. As such, the board believes that the proposed private placement, subject to the consent from other lenders of Kinsteel (if required), is an expeditious method in addressing the company's immediate financial obligation with regards to the repayment of the Murabahah.
Kinsteel's private placement of 10% of its paid-up is expected to raise gross proceeds of RM29.16mil which will be mainly utilized to partially repay the outstanding debt notes.
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