IRCB - cleared all its debts

It has entered into a debt settlement agreement that cleared all its debts with four banks. This raises the hope that it could be uplifted from PN17 status.

The debts were settled via cash advances of rm44.8 million from its investors. The cash advance agreements were entered into between the company and its investors Cheang Poy Ken and Keen Setup Sdn Bhd for a cash advancement of rm44.8 million to the company for the purpose of its debt settlement.

Due to defaults in debt payments to the lenders, IRCB was classified as a PN17 financially distressed company on Dec 27 2012.

The debt settlement is expected to contribute positively towards the earnings of IRCB for the FY2013 Jan 2014 due to a one off gain from the debt waived by the lenders as well as a reduction in loan interest.

In Jan 2013, Cheang Phoy Ken, a former MD and owner of delisted rubber glove producer, Seal Polymer Industries has secured the management control of rival IRCB. This followed Cheang’s acquisition of a substantial stake in IRCB from its current controlling shareholders with a 11.23% stake at 15 sen each. Tan and his family still owns 11.3% stake after the off market deal.

IRCB’s substantial shareholder Lau Joo Yong had acquired some 4.13 million IRCB shares on Jan 31 2013 from the open market, thus raising his stake in the rubber glove company to 7.57% stake. Lau also bought some 1.2 million IRCB shares from the open market on Jan 29, 2013.

In Feb 2013, Cheang was appointed as MD of IRCB, following the resignation of major shareholder Tan Keng Beng, after his family sold a 10.89% stake to Cheang via an off market deal.