Stock Name: ALAM
Company Name: ALAM MARITIM RESOURCES BHD
Research House: OSK

KUALA LUMPUR: OSK Research has cautioned of potential provision for doubtful debts by Alam Maritim following its exposure to Vastalux which is currently undergoing debt restructuring.

'We are downgrading our FY10-11 earnings by 12%-18% respectively and cut the stock to a Neutral, with a lower target price of RM1,' it said on Thursday, Dec 2. The previous target price was RM1.46.

OSK Research said Vastalux had proposed a debt restructuring scheme with its creditors, one of which is Alam Maritim.

The amount owing by Vastalux to its creditors is about RM146.8 million, to be resolved through: i) new ordinary shares of Vastalux (20%); ii) redeemable cumulative unsecured loan stocks (RCULS) (50%), and iii) the balance 30% to be waived.

Alam together with the other creditors has until Friday to decide whether to accept the proposal, to re-negotiate further, or consider the amount owing as bad debts.

'We understand that management is still considering their options and no decision had been made to date. Also, we gathered that the amount owing to Alam is less than RM30 million,' said the research house.