Ho Hup applies for early exit from PN17

PETALING JAYA: Ho Hup Construction Company Bhd has submitted an application to Bursa Malaysia Securities for an early upliftment from being classified as a Practice Note 17 (PN17) company under the listing requirements, confirming a SunBiz report which was published last year.
In a statement, Ho Hup said it completed its financial regularisation exercise at the end of last year. The regularisation exercise of the company was completed with the listing of the right shares irredeemable convertible preference shares, redeemable convertible preference shares and warrants.
The submission comes one week after the announcement of Ho Hup's latest financial performance for the fourth quarter ended Dec 31, 2013 (Q4).
For Q4, the group recorded a net profit of RM12.9 million thanks to property development division in view of the higher profit margins from property development activities.
For the full year period, it posted a net profit of RM22.5 million. The turnaround in FY13 is due to recognition of profit after tax from property development division, construction division and translation service write back from the disposal of associated company.
"As at December 2013, the company has achieved six consecutive quarters of profit," it said.
Last year, Ho Hup executive director Derek Wong Kit Leong had told SunBiz that he was hopeful that Ho Hup can exit the PN17 category, for financially distressed companies, much earlier than June 2014, a target that was initially made.
In accordance with the PN17 Section 5.2(c) of the listing requirements, a company that undertakes a regularisation plan which does not result in a significant change in the business direction or policy of the PN17 company must record a net profit for two consecutive quarterly results immediately after the completion of the implementation of the plan.
The application is subject to Bursa Malaysia's approval.
Ho Hup was classified as a PN17 company since 2008 and its regularisation plan involves a capital reduction, a rights issue of loan stocks with free detachable warrants and a scheme to repay its creditors.
Wong noted that Ho Hup's three core divisions, property, construction and ready mixed concrete are performing well.
"Although we are not out of PN17, operationally we are profitable in all divisions.
"We do not foresee any more quarterly losses. We will be profitable all the way going forward barring any unforeseen circumstance," Wong said last year.