PETALING JAYA: Federal Land Consolidation and Rehabilitation Authority (Felcra) is looking to acquire a stake in Practice Note 17 (PN17) company Kuantan Flour Mills Bhd (KFM) via a reverse takeover (RTO).
KFM’s share price doubled yesterday, closing at 8 sen with 1.02 million units traded.
In a filing with Bursa Malaysia yesterday, KFM said it has secured a letter of interest (LoI) from Felcra on its interest to explore and possibly participate in KFM’s equity.
Felcra said its overture will be driven by the objective of assessing the feasibility and viability to achieve, among others, the successful injection of suitable profit-generating assets into KFM in an RTO, turnaround of KFM’s existing business, regularisation of KFM’s status out of PN17 and suitable return and/or synergistic value creation to Felcra.
Felcra said its ability to move forward on the initiative is subject to favourable outcome of its feasibility and viability study, satisfactory outcome of due diligence and approvals of Felcra’s board of directors, and relevant ministries and authorities.
The effective date of the LoI is Dec 9, 2016 and it will remain valid for not more than six months.
KFM became a PN17 company in December last year. It is still in the midst of formulating a regularisation plan and has until the end of December to submit the regularisation plan for approval.
In a separate filing yesterday, KFM said it has applied to Bursa Malaysia for an extension of six months to finalise and submit its regularisation plan.
For the financial year ended Sept 30, 2016, KFM’s net loss narrowed to RM12.09 million from RM16.85 million a year ago while revenue plunged to RM3.92 million from RM24.86 million a year ago.
THE SUN DAILY