Business

Friday May 29, 2009

Transmile set to revamp RM569mil debts


KUALA LUMPUR: Transmile Group Bhd is finalising the restructuring of supplemental loan agreements for its total debts of about RM568.7mil but is unsure when it would break even.

At the company AGM yesterday, managing director Liu Tai Shin said: “The supplemental loan agreements are currently being finalised and once signed, we will inform Bursa Malaysia the details of the restructuring terms and conditions.

“This is an important milestone in the turnaround plan for the group as it provides the company time and stability to re-build its operations and become profitable again.”

Transmile is negotiating with bankers to restructure its current debt obligations comprising a syndicated term loan of US$66.9mil, medium-term notes amounting to RM105mil and 1% guaranteed convertible bonds of US$65.6mil

Liu later told reporters: “I think it is a tall order to say when we will break even. It really depends on how fast and how much we can sell the planes (fleet of four MD11) for.”

A narrow-body 727 cargo plane undergoing service and maintenance in Subang

The regional express cargo carrier has been posting annual net losses since 2005 but is mainly remembered for an accounting scandal in mid-2007 which resulted in a change of management and massive drop in share price from its high of RM14.40 on Jan 3, 2007 to a low of 50 sen on Oct 29, 2008.

The counter is currently trading at about 80 sen per share.

Liu said the demand was there for the MD11s but the potential buyers with whom the company had been in talks in the past 18 months had been unable to secure financing for previously agreed prices.

The main drag on the company’s earnings at present were the depreciation on the four MD11s and the interest costs for the loans amounting to RM48.5mil for the financial year ended Dec 31, 2008 (FY08).

For FY08, the company posted depreciation of RM42.7mil for aircraft and RM17.4mil for aircraft parts and equipment.

The situation should improve once the aircraft were sold and the proceeds used to pay off the loans, Liu said but added that until then, there was a “need to be realistic” as the company’s loan interest needed to be serviced.


TRANMIL : [Stock Watch] [News]


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