LIMAHSOON Bhd’s new chairman, Paul Lim Pang Kiam, makes do with a light breakfast just before meeting StarBizWeek at a kopitiam in Bangsar, but it is nevertheless clear that his plate is full as far as his professional life in concerned.
Two months ago, the 47-year-old former senior bank executive gained control of the troubled maker of laminated rubberwood products. Within that relatively short time, he has found a white knight to hopefully revive the company.
If the plans to bring in grocery wholesaler NSK group of companies materialises, Limahsoon’s new core business is forecast to generate an annual revenue of around RM500mil.
That is more than 10 times larger than Limahsoon’s peak revenue of RM44.9mil achieved in 2004, the year it was listed.
“We have identified the NSK Group as a potential white knight, but there is still a lot of work to be done,” says Lim.
He is sticking to his year-end target to submit a regularisation plan and get Limahsoon out of the PN17 category.
While Lim is invested in Limahsoon, he is also committed to LCL Corp Bhd, where he was the chief executive officer since last November.
After two failed attempts to secure new investors, the situation remains desperate at LCL.
According to Lim, interior fit-out specialist LCL must survive in order to collect payments due from clients in Dubai, who did not settle their bills for work done after they were hit by the financial crisis late last year.
“We need to remain in business to get paid for work already completed,” he explains.
Coincidentally, Limahsoon and LCL were classified as PN17 companies in the same month – December last year.
The two companies must come up with a plan to regularise their financial position within one year after they slipped into the PN17 category.
Finding a white knight for each is just one part of the story.
The more complex aspect is to package complete restructuring exercises into palatable solutions for all stakeholders.
“I’ve managed to take a two-day trip with my family to Cameron Highlands during the recent school holidays,” says the corporate banking head-turned-corporate player.
“That was that. The past few months has been nothing else but work.”
Lim started his career in banking in 1989. He left the industry in 2003 to become a director at Pantai Holdings Bhd.
He went on to become an executive director at furniture component maker SYF Resources Bhd, prior to assuming the post of CEO at Atrium REIT Managers Sdn Bhd.
During his stint at SYF, Lim played an active role in an industry grouping, thus allowing him to expand his network of contacts and his understanding of the timber and furniture-making business.
His industry exposure, coupled with the corporate finance contacts from his banking days, provided a strong background for his current business venture.
He claims that he took up the offer to helm LCL at the invitation of founder Datuk Low Chin Meng, an old friend, and that he has no shares in the company. His involvement in Limahsoon, however, came after buying a significant stake in the company.
Filings with Bursa Malaysia show that his investment vehicle, PNL Business Services Sdn Bhd, acquired a 19.28% stake in Limashsoon in late April in a direct transaction at an undisclosed price.
Lim says PNL acquired the stake from the controlling family at a “bargain” price because he saw “hidden values” in the company.
Two weeks after he surfaced in Limahsoon, the company told the exchange it had entered into negotiations with the NSK group for a possible reverse takeover.
Lim was made chairman at Limahsoon on May 26, taking over from the son of the founder as the family relinquished its grip on the company.
Two other shareholders in PNL, Loh Teck Wah and Yap Chee Kheng, were appointed executive directors at Limahsoon in May, prior to Lim’s redesignation as chairman.
Through PNL, Lim was able to assert control over Limhasoon, despite holding less than a fifth of its shares, because the other minorities were well spread out.
Limahsoon’s latest annual report showed that the next largest shareholders as at April 30 included Syarikat Vanlin Sdn Bhd (with a 17.24% stake), Sureplex Sdn Bhd (5%) and Koperasi Polis Diraja Malaysia Bhd (3.74%).
It is unclear whether Lim or PNL has struck a deal with any of the other shareholders.
Limahsoon was listed in July 2004. It fell into the red in the financial year ended December 2007 incuring RM10.6mil loss.
By the end of 2009, the losses had widened to RM39.7mil after it had wrote off soured investments in a venture into activated carbon and pulp making.
Revenue dwindled to just RM8.4mil during that year as the group wound down its operations, while debts grew to more than RM90mil.
The loans are secured against the group’s main plant in Beranang, Selangor. “We are looking at several options and are working with creditors to resolve the debt issue,” Lim says.
It was previously reported that Limahsoon had defaulted on payment for outstanding facilities totalling RM91.4mil to Bank Pertanian Malaysia Bhd (now known as Agrobank). Given the size of the NSK group’s current business, it is likely that it would overwhelmed Limahsoon’s core wood product operations.
NSK’s owners are likely to emerge as Limahsoon’s controlling shareholders post-restructuring, assuming, of course, that the regularisation plan can take off.
The rescue package is Limahsoon stakeholders’ best hope of salvaging some value. A lot depends on whether Lim can pull it off. At the same time, he may also make a tidy profit from his shrewd investment if all goes as planned.
By IZWAN IDRIS
izwan@thestar.com.my
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