KUALA LUMPUR: Beleaguered TRANSMILE GROUP BHD [], whose shares has been suspended since Thursday, March 3, has proposed a scheme of arrangement to ring fence its unit Transmile Air Services Sdn Bhd'' (TAS) and preserve it as a going concern.
The scheme would involve two inter-conditional schemes of arrangement by Transmile and TAS as the group looked into the possibility of inviting new potential investors into TAS, which is the main operating subsidiary in the group.
The proposed schemes are to avert the delisting of the group which has continued to suffer losses since a scandal was unearthed back in 2007 which saw inflated revenue of around RM625 million between the financial years 2004 and 2006.
Under the TAS scheme announced on Friday, March 4, the total amount outstanding was about RM680.3 million as at Dec 31, 2010. The creditors consisted of Transmile (by virtue of the debt owed by TAS to Transmile) and the financial lenders of TAS.
As for Transmile, its own creditors would comprise of the financial lenders with potential claims of up to RM426.5 million as at Dec 31, 2010.
The proposed two-stage TAS scheme would be firstly to revamp TAS' debt and inter-company debt while the second would be to invite new potential investor(s) to be identified.
The plan is to transfer the TAS debts to a special purpose vehicle (SPV) to be owned by Transmile together with the sales proceeds from the proposed disposal of the MD-11F aircraft amounting to about US$68 million (RM210.4 million).
The proceeds from the disposal of the aircraft would be retained by the SPV and shall be applied (except for Transmile) based upon the final outcome of a legal case concerning the question of whether the medium-term notes holders have priority in repayment against the other financial lenders.
Transmile said the debt restructuring also entails the waiver of inter-company debts of RM60.3 million which TAS owed to two units.
Upon completion of the debt revamp, Transmile would seek potential investors. The proceeds would be used to settle the amounts owed to the creditors of Transmile and TAS.
As for the proposed Transmile scheme, it would hinge on the TAS scheme would be assigning the potential proceeds from proposed investors and also effect the inter-company waiver.
To recap, the sale of four MD-11 aircraft to Federal Express Corporation for US$68 million (RM207 million) last month was only enough to pare down 39% of RM528.9 million in outstanding debt obligations, leaving it with a balance of around RM320.1 million in debt obligations.
As at Dec 31, 2010, the group had long-term assets of RM121.2 million, and cash equivalents of RM27.9 million. Its shareholders' fund is in deficit of RM147 million while total borrowings stood at RM531.5 million.
Last month, its managing director Liu Tai Sin told The Edge that the target for this year was to resolve all its debt woes so as to turn the company around.
The scheme would involve two inter-conditional schemes of arrangement by Transmile and TAS as the group looked into the possibility of inviting new potential investors into TAS, which is the main operating subsidiary in the group.
The proposed schemes are to avert the delisting of the group which has continued to suffer losses since a scandal was unearthed back in 2007 which saw inflated revenue of around RM625 million between the financial years 2004 and 2006.
Under the TAS scheme announced on Friday, March 4, the total amount outstanding was about RM680.3 million as at Dec 31, 2010. The creditors consisted of Transmile (by virtue of the debt owed by TAS to Transmile) and the financial lenders of TAS.
As for Transmile, its own creditors would comprise of the financial lenders with potential claims of up to RM426.5 million as at Dec 31, 2010.
The proposed two-stage TAS scheme would be firstly to revamp TAS' debt and inter-company debt while the second would be to invite new potential investor(s) to be identified.
The plan is to transfer the TAS debts to a special purpose vehicle (SPV) to be owned by Transmile together with the sales proceeds from the proposed disposal of the MD-11F aircraft amounting to about US$68 million (RM210.4 million).
The proceeds from the disposal of the aircraft would be retained by the SPV and shall be applied (except for Transmile) based upon the final outcome of a legal case concerning the question of whether the medium-term notes holders have priority in repayment against the other financial lenders.
Transmile said the debt restructuring also entails the waiver of inter-company debts of RM60.3 million which TAS owed to two units.
Upon completion of the debt revamp, Transmile would seek potential investors. The proceeds would be used to settle the amounts owed to the creditors of Transmile and TAS.
As for the proposed Transmile scheme, it would hinge on the TAS scheme would be assigning the potential proceeds from proposed investors and also effect the inter-company waiver.
To recap, the sale of four MD-11 aircraft to Federal Express Corporation for US$68 million (RM207 million) last month was only enough to pare down 39% of RM528.9 million in outstanding debt obligations, leaving it with a balance of around RM320.1 million in debt obligations.
As at Dec 31, 2010, the group had long-term assets of RM121.2 million, and cash equivalents of RM27.9 million. Its shareholders' fund is in deficit of RM147 million while total borrowings stood at RM531.5 million.
Last month, its managing director Liu Tai Sin told The Edge that the target for this year was to resolve all its debt woes so as to turn the company around.
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