Teck Guan Perdana Bhd fell 13 sen or 23% yesterday to close at 43 sen two days after it told Bursa Malaysia Securities that it has been unable to collect a total of RM71.56 million owed to the company by its trade creditors.
The stock was not traded on Wednesday, and yesterday’s volume was weak, with only 15,000 shares changing hands. It was traded between 43 sen and 44 sen during the day.
The company had on Tuesday evening reported that its outstanding related party transaction (RPT) receivables for more than 12 months totalled RM71.56 million.
It expects full recovery by end of January 2012. It expects RM39.61 million to be settled within 12 months and the remaining RM31.95 million to be resolved within one to two years.
The owed money, categorised as trade receivables, usually has a 30- day credit period. Teck Guan is an illiquid and a rarely traded stock.
Analysts pointed out that its trade credit was defaulted not because of its business partners, but owed to them by a related company.
Teck Guan’s annual report for its financial year ended Jan 31, 2010 showed it was owed RM70.63 million as trade receivables by a “related company”.
“Related companies comprise companies within the HTG Holdings Sdn Bhd group of companies. The group’s primary exposure to credit risk arises through its trade receivables,” according to its annual report.
It is learnt that its deputy chairman Hong Kim Fah owns HTG Holdings. Wires records show that HTG Holdings has a 59.8% majority stake in Teck Guan.
This article appeared in The Edge Financial Daily, July 9, 2010.
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