Zealand - restructuring exercise

Loss making is set to clean up its balance sheet after shareholders approved a corporate restructuring exercise.

The restructuring will effectively wipe out its accumulated losses and pare down its debts.

It has an order book of about rm4 billion including its concession.

The restructuring exercise is aimed at reducing its accumulated losses and debt level. As at 1QFY2014 ended June 30, its accumulated losses stood at rm385 million while total borrowings were rm417 million.

The proposed par value reduction (from 50 sen to 10 sen) will enable it to reduce its accumulated losses via the cancelation of its issued and paid up capital that is not represented by the available assets of its company.

The existing Zeland shares have been trading below its existing par value of 50 sen for the past one year and its not conducive for it to embark on any fund raising and corporate exercise involving a new issuance of shares without undertaking the proposed par value reduction.

Its biggest shareholder MMC Corp has agreed to subscribe to its full entitlement of Zeland rights shares, which is 39.25% of the 281.63 million proposed rights shares.

The restructuring is expected to be completed by end FY2014 ending march 31.