KUALA LUMPUR: LION INDUSTRIES CORPORATION [] Bhd has accepted RM26.19 million as full settlement from Likom Computer System Sdn Bhd for rental owing.
Lion Industries said on Wednesday, Dec 29 that it had agreed to waive the interest of RM11.05 million as Likom had ceased operations in 2004.
Likom owed rental and interest amounting to RM37.25 million for the lease of a factory building for its operations in Melaka TECHNOLOGY [] Park.
Lion Industries said the rental due from Likom has been long outstanding and since Likom had ceased operations in 2004, it was unlikely that Likom would be able to make full payments of the outstanding rental plus interest in the short term.
'It is common practice for corporations in seeking to recover debts from defunct companies to waive certain portions of the interest outstanding. The proposed waiver is a reasonable amicable solution as Likom will be paying the entire rental due in full and a substantial portion of the interests,' it said.
It added the group would use the monies received for its working capital requirements and for repayment of borrowing.
In July 1997, Lion Industries and Likom had signed a lease agreement and the lease of the building expired in February 2005.
However, the lease was not renewed as Likom had ceased its operations in 2004.'' Likom had not been able to pay its outstanding rental thereby incurring interest calculated at 8% per annum.
Lion Industries said in consideration of the waiver of the RM11.06 million in interest, Likom had paid in full the outstanding principal rental amount of RM11.94 million on Dec 29.
'The balance interest amounting to RM14.25 million would be paid in nine equal monthly instalments (amounting to RM1.58 million) commencing January 2011 and ending September 2011,' it said.
Lion Industries said on a proforma basis, the proposed waiver was not expected to have a material impact on the group's earnings for the financial year ending June 30, 2011 as the amount of RM11.06 million had been provided for in the financial year ended June 30, 2010.
It said the directors who did not consider themselves independent over the proposed waiver were Tan Sri Cheng Yong Kim, who is a substantial shareholder of the company and had substantial interest in Amble Bond Sdn Bhd, the holding company of Likom.
The other directors were Cheng Yong Liang, the brother of Tan Sri Cheng Yong Kim, who had a substantial interest in Amble Bond; Datuk Kamaruddin @ Abas Nordin who is an executive director of Lion Courts Sdn Bhd (a unit of Lion Industries); and Tan Sri Cheng Heng Jem, who is a major shareholder of the company.
'The audit committee of Lion Industries, having considered all relevant aspects of the proposed waiver, said the waiver was in the best interest of Lion Industries, fair, reasonable and on normal commercial terms, and not detrimental to the interest of minority shareholders.
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Lion Industries said on Wednesday, Dec 29 that it had agreed to waive the interest of RM11.05 million as Likom had ceased operations in 2004.
Likom owed rental and interest amounting to RM37.25 million for the lease of a factory building for its operations in Melaka TECHNOLOGY [] Park.
Lion Industries said the rental due from Likom has been long outstanding and since Likom had ceased operations in 2004, it was unlikely that Likom would be able to make full payments of the outstanding rental plus interest in the short term.
'It is common practice for corporations in seeking to recover debts from defunct companies to waive certain portions of the interest outstanding. The proposed waiver is a reasonable amicable solution as Likom will be paying the entire rental due in full and a substantial portion of the interests,' it said.
It added the group would use the monies received for its working capital requirements and for repayment of borrowing.
In July 1997, Lion Industries and Likom had signed a lease agreement and the lease of the building expired in February 2005.
However, the lease was not renewed as Likom had ceased its operations in 2004.'' Likom had not been able to pay its outstanding rental thereby incurring interest calculated at 8% per annum.
Lion Industries said in consideration of the waiver of the RM11.06 million in interest, Likom had paid in full the outstanding principal rental amount of RM11.94 million on Dec 29.
'The balance interest amounting to RM14.25 million would be paid in nine equal monthly instalments (amounting to RM1.58 million) commencing January 2011 and ending September 2011,' it said.
Lion Industries said on a proforma basis, the proposed waiver was not expected to have a material impact on the group's earnings for the financial year ending June 30, 2011 as the amount of RM11.06 million had been provided for in the financial year ended June 30, 2010.
It said the directors who did not consider themselves independent over the proposed waiver were Tan Sri Cheng Yong Kim, who is a substantial shareholder of the company and had substantial interest in Amble Bond Sdn Bhd, the holding company of Likom.
The other directors were Cheng Yong Liang, the brother of Tan Sri Cheng Yong Kim, who had a substantial interest in Amble Bond; Datuk Kamaruddin @ Abas Nordin who is an executive director of Lion Courts Sdn Bhd (a unit of Lion Industries); and Tan Sri Cheng Heng Jem, who is a major shareholder of the company.
'The audit committee of Lion Industries, having considered all relevant aspects of the proposed waiver, said the waiver was in the best interest of Lion Industries, fair, reasonable and on normal commercial terms, and not detrimental to the interest of minority shareholders.
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