Friday, August 6, 2010

Stamford College to appeal Bursa rejection

KUALA LUMPUR: STAMFORD COLLEGE BHD [], whose proposed regularisation exercise was rejected by Bursa Malaysia Securities, has decided to appeal against the rejection.

The education services provider said on Friday, Aug 6 the board had deliberated on the rejection through various meetings and had on Thursday decided to appeal against Bursa Securities' decision within one month.

The proposed regularisation would involve the reduction of the share capital by cancelling 50 sen of the par value of each RM1 share. It would also involve venturing into steel manufacturing.

Bursa Securities had, i its rejection letter announced on July 26, said the rejection was premised on the concern that the plan did not comply with the Main Market Listing Requirements which specified the regularisation plan must be sufficiently comprehensive and capable of resolving all problems, financial or otherwise.

The steel manufacturing business undertaken by Stamford College had only started operations in February 2010 and had yet to show it was able to generate profits and positive cashflows or be proven to be a viable business.

Another factor was that the company's steel manufacturing business was highly dependent on a single supplier and single customer, which was a related party, to sustain its business operations.

Bursa Securities had highlighted that the education business is highly competitive with a low barrier to entry.

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