Octagon signs revised debt settlement scheme

PETALING JAYA (Feb 19, 2014): Octagon Consolidated Bhd and its subsidiary, Advanced Pyrotech Sdn Bhd (APT), signed a revised debt settlement scheme to restructure about RM182.6 million owed to financial institution creditors, which forms 80% of its total creditors balance.
The PN17 company said under the revised scheme, Octagon's total exposure to the financial institution creditors, secured and unsecured, totaling RM182.6 million will now be settled via a combination of cash and issuance of new Octagon shares.
It said this cash portion amounting to RM48.06 million would be met with RM20 million proceeds from the disposal of APT's plant and assets, RM28.06 million from part of Octagon's fund raising exercise under its regularisation plan while the issuance of new Octagon shares with free warrants will amount to RM6.67 million.
The financial institution creditors comprise Kuwait Finance House (Malaysia) Bhd, Amanah Raya Capital Sdn Bhd and Malayan Trustees Bhd.
With the agreement of financial institution creditors to a revised debt settlement scheme, the company can now move towards its plan for the reconstruction of its capital, fund raising and diversification into the copper mining business in Australia to effect a turnaround of its business.
In a statement yesterday, Octagon said the agreement is a major and significant step forward for the company in its efforts to regularise its operations and financial condition.
Its proposed regularisation plan comprises two components, where a key component involves turning around its business operations through the diversification into the copper mining business via a joint development agreement with Malaco Mining Sdn Bhd and Malaco Leichhardt Pt Ltd and an operation agreement with Malaco Leichhardt.
To fulfill its obligations under the agreements with Malaco Mining and Malaco Leichhardt, it said Octagon will have to restructure and strengthen its financial position involving, among others, the settlement of debts.