Business

Tuesday August 4, 2009

Lion unit in default of credit facilities


PETALING JAYA: Megasteel Sdn Bhd, a subsidiary of Lion Corp Bhd, is in default of a credit facility granted by Bank Pembangunan Malaysia Bhd and a syndicated term-loan facility granted by syndicated term-loan lenders.

However, Megasteel remains “solvent as it will be able to pay all debts as and when they fall due within a period of 12 months from the date of this announcement,” Lion Corp told Bursa Malaysia yesterday.

It said the downturn in the global financial and commodities market since the fourth quarter of 2008 had caused a “drastic weakening” of the domestic and global steel markets, adversely affecting Megasteel’s financial performance.

“As a result, Megasteel was not able to meet the principal payment due in respect of the credit facilities,” it said.

As at July, Megasteel’s total outstanding principal amount stood at RM47.6mil for the Bank Pembangunan credit facility and RM1bil for the syndicated term-loan.

Lion Corp said Megasteel was in the final stages of negotiations to schedule the repayment of the credit facilities.


LIONCOR : [Stock Watch] [News]


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