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Author: PublicInvest   |   Latest post: Tue, 22 Oct 2019, 9:06 AM

 

LONDON BISCUITS BERHAD - Slapped with Several Writ of Summons and Statement of Claim

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London Biscuits (LBB) announced that it received Writ of Summons and Statement of Claim from Malaysian Trustees Berhad (MTB), Alliance Bank Malaysia Berhad (ABMB) and Bangkok Bank Berhad (BBB). We are concerned as the financial facilities granted cannot be utilized further for working capital purposes, putting additional strain on LBB’s tight liquidity position of 0.9x net gearing. Furthermore, it is particularly alarming as LBB had previously defaulted on a loan of RM9.8m from Bank of Nova Scotia on 3rd July which caused the company to slip into PN17. The company is currently seeking solicitor’s advice on the necessary course of action. We opine that the company could monetize some of its assets to raise fresh capital. As at 30 June 2019, LBB’s net assets stood at RM1.28 per share. Overall, any revitalization plan to uplift LBB from its PN17 status will be made tougher in light of this latest development. We retain our TP of RM0.12 and Trading Sell call.

  • Bangkok Bank Berhad. BBB claimed a total judgement sum of RM64.2m under several different banking facilities (Overdraft Facility, Term Loan 1, Term Loan 2, Revolving Loan Facility and Combines Trade Facilites) along with continuing interest calculated on monthly rest until the date of full settlement.
  • Alliance Bank Malaysia Berhad. ABMB claimed a total judgement sum of RM7.9m under several different banking facilities (Overdraft Facility, Term Loan Facility, Omnibus Trade Line Facility and Visa Infinite Business Card Facility) along with continuing interest calculated on daily rest until the date of full settlement.
  • Malaysian Trustees Berhad. MTB claimed a total of RM96.7m together with interest which shall accrued daily and calculated monthly.

Source: PublicInvest Research - 18 Sept 2019

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