KUALA LUMPUR: The Corporate Debt Restructuring Committee (CDRC) has accepted CAROTECH BHD []'s application to mediate between the company and its financial creditors on its proposed debt revamp.
Carotech said on Thursday, July 1 the CDRC had accepted the application to be the mediator and "the CDRC has allowed the company a period of six months to complete the scheme".
The company will make the necessary announcement once the scheme has been finalised.
Meanwhile, HOVID BHD [], which owns 58% of Carotech, said the latter had defaulted on its principal and interest servicing in respect of certain banking facilities from financial institutions.
"The default arose mainly due to over expansion of capacity, significant rise in working capital and inability to clear stocks due to curtailed demand arising from poor economic conditions in Europe and US. Nevertheless, Carotech's underlying business model and products remain sound and well received in the markets," it said.
Hovid said it did not have any obligation on the defaulted loans by Carotech.
"Carotech is currently working directly with the financial institutions with the assistance of the CDRC to construct and implement a Debt Restructuring Plan," it said.
Hovid also said it would be able to continue with its existing business. Hovid manufactures and distributes pharmaceutical products.
"The business is independent of Carotech," it said.
Carotech said on Thursday, July 1 the CDRC had accepted the application to be the mediator and "the CDRC has allowed the company a period of six months to complete the scheme".
The company will make the necessary announcement once the scheme has been finalised.
Meanwhile, HOVID BHD [], which owns 58% of Carotech, said the latter had defaulted on its principal and interest servicing in respect of certain banking facilities from financial institutions.
"The default arose mainly due to over expansion of capacity, significant rise in working capital and inability to clear stocks due to curtailed demand arising from poor economic conditions in Europe and US. Nevertheless, Carotech's underlying business model and products remain sound and well received in the markets," it said.
Hovid said it did not have any obligation on the defaulted loans by Carotech.
"Carotech is currently working directly with the financial institutions with the assistance of the CDRC to construct and implement a Debt Restructuring Plan," it said.
Hovid also said it would be able to continue with its existing business. Hovid manufactures and distributes pharmaceutical products.
"The business is independent of Carotech," it said.
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