KUALA LUMPUR (June 4): Golden Pharos Bhd (GPB) has proposed to settle RM12 million owed to Terengganu Incorporated Sdn Bhd (Terengganu Inc) via the issuance of 12 million redeemable preference shares (RPS) at an issue price of RM1 each.

The group is also proposing amendments to its constitution to facilitate the issuance of the RPS pursuant to the proposed settlement.

In a filing with Bursa Malaysia today, GPB said since 2010, Terengganu Inc had from time to time provided advances to the group and its subsidiaries and the total amount owing, including interest charges, as at May 31 this year was RM12 million.

It said the amount owed by GPB was non-trade in nature, unsecured, and did not have any fixed repayment terms.

GPB is principally involved in logging and sawmilling activities, as well as manufacturing wood-based products and processing of glass.

The group recorded losses for the financial year (FY) 2009 and FY2010, mainly due to a drop in overseas sales of wooden doors as a result of a general economic downturn, leading to the company deciding to exit the door fabrication business in 2010.

“In 2010 and 2011, Terengganu Inc advanced to GPB a total of RM10 million to defray GPB’s expenses relating to the cessation of operations of Golden Pharos Doors Sdn Bhd, a subsidiary of GPB, as part of a restructuring exercise.

“In 2017, Terengganu Inc further advanced to GPB an additional RM1 million to fund the installation of the production line for the group’s woodchip business,” it said.

The group said pursuant to the settlement agreement, Terengganu Inc shall waive all interest charges payable by GPB for the amount owing from Jan 1, 2020 until the completion of the proposals.