PETALING JAYA, FEB 17: Practice Note 17 (PN17) company Asia Knight Bhd is in danger of being delisted after it aborted plans to acquire construction firm, PA Builders Sdn Bhd (PABSB), citing a weaker ringgit and economic uncertainties.
Plastic parts manufacturer Asia Knight was looking to regularise its financial position by venturing into the construction sector via the acquisition.
Under the plan, the company had proposed a capital reduction, share premium reduction, rights issue with warrants and acquisition of PA Builders for RM75 million.
In a stock exchange filing yesterday, Asia Knight said it had on Feb 15 entered into a deed of termination to mutually terminate and rescind the share sale agreement (SSA) to acquire 100% of construction company PA Builders.
It explained that with the weakening of the ringgit and the uncertainties of the Malaysia economy, PA Builders is experiencing an unexpected slowdown in getting feedback from the projects tendered for.
“PA Builders also faces slower collection from its customers and increased operating costs. In the circumstances the parties have agreed to terminate the SSA by mutual consent,” it said.
Among the conditions stipulated in the SSA signed in Oct 2015, was that the sellers have a covenant and agreed to warrant to Asia Knight that the profit after tax of PA Builders group for the financial years ending July 31, 2016, and July 31, 2017, shall not be less than RM8 million per annum.
Asia Knight is expected to submit an application to Bursa Securities for a time extension to seek a suitable asset and to submit its regularisation plan.
“An announcement will be made in due course upon the submission of the application,” it said.
On Nov 18, 2015, Asia Knight was given an extension of up to Feb 29, 2016, to submit a regularisation plan to the Securities Commission Malaysia.