THE prospects of Practice Note 17 company, Kenmark Industrial Co (M) Bhd, (7030) which is in the midst of trying to get back on its feet, look bleak.
Yesterday, it was served with winding-up petitions by one of its lenders, Export-Import Bank of Malaysia Bhd (Exim Bank), for non-payment of loans.
Exim Bank wants to wind up both the holding company, Kenmark, and its major subsidiary, Billion Dynamic Sdn Bhd.
The petitions could not have come at a worse time as Kenmark spoke yesterday of its need to raise funds or secure trade financing to buy much-needed raw materials for its printing division.
"Some of our local suppliers had indicated their willingness to continue supplying the company with raw materials subject to payments made to overdue accounts.
"As some raw materials are imported from Thailand, Taiwan and Europe, the company would need to raise funds and/or secure trade financing to secure these raw materials for future orders," Kenmark said.
In a statement approved by its Malaysian directors, Kenmark detailed problems it was having in getting a hold of its clients, obtaining raw materials and gaining access to its operations in Vietnam.
All machineries in Vietnam are intact, but operations cannot restart as the Taiwanese key management staff have not returned to Vietnam.
Kenmark's management has been trying to contact Chang Chin-Chuan, executive director in charge of the Vietnamese operations, on his handphone, but to no avail.
Raw materials in Vietnam cannot be taken out without authorisation from the Taiwanese key management staff. Workers in Vietnam have also been released without any liabilities.
Kenmark also told the stock exchange that its trading operations were at a standstill, with the management still not able to contact its end-customers directly.
On its printing division, Kenmark said it was trying to persuade customers which have switched manufacturers to order from it again.
"We expect 20 per cent of the orders to return," Kenmark said.
About 67 out of 125 of the division's employees have returned to work.
Kenmark also said that it expected production activity at its plastic moulding division to be down by at least 95 per cent in the absence of fresh orders for the wood division and with outside buyers losing their confidence in the company.
"The board of directors is exploring options to increase the utilisation of the capacity of all its operations," Kenmark said.
In a separate announcement, Kenmark said that the correct shareholding of Hwang Ding Kuo @ James Hwang is 6.26 million Kenmark shares, which translates into a 3.51 per cent stake.
Chen Wen-Ling's shareholding in Kenmark, based on records dated June 30 2010, is 13.832 million Kenmark shares, or a stake of about 7.76 per cent.
The percentage amounts are the same as previously disclosed.
- by Business Times
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