The Company wishes to announce an amendment to the announcement on 23 June 2020 and 24 June 2020 in relation to the default in payment to Alliance Bank Malaysia Berhad. Kindly disregard the earlier announcements and the Company now announces as follows:-

1.         Introduction                          

The Board of Directors of Khee San Berhad (“KSB” or “the Company”) wishes to announce that the Company had on 22 June 2020 received a Writ of Summons together with the Statement of Claim (“the Writ of Summons”) filed by Messrs. Benjamin Dawson., solicitors representing their client, Alliance Bank Malaysia Berhad (“ABMB”) on Khee San Food Industries (“KSFI”) and KSB, wherein KSB has entered appearance on 22 June 2020.

ABMB’s claim against KSFI and KSB are as follows:-

i)          The total sum of RM4,701,013.30 as at 18 May 2020;

ii)         Interests on the sum of RM4,277,000.00 at the rate of 4.00% per annum above for ABMB’s Base Lending(“BLR”) (presently the ABMB’s BLR is 5.67% per annum as at 18 May 2020 subject to fluctuations at the Plaintiff’s absolute discretion) and penalty interest at the rate of 1.00% per annum calculated on daily rest from 19 May 2020 until the date of full settlement.

iii)         Reimbursement of the Plaintiff’s legal cost of RM7,497.70;

iv)         Costs against KSB on a full indemnity basis ; and

v)         Any other relief or remedy that the Honourable Court deems fit.

The parties have appeared before the Court on 23 June 2020 for the case management via e-Review and the Court has given the directions as follows:-

i) Defendants to enter defense on or before 14 July 2020;

ii) The Plaintiff to file the Reply to the Statement of Defense on or before 4 August 2020; and

iii) Any interlocutory applications to be filed on or before 18 August 2020.

Further, the next case management has been fixed on 18 August 2020 before the learned High Court Judge, Yang Arif Hakim Darryl Goon Siew Chye.

2.         The date of the default in payment.                

The Company had on 22 June 2020 received the Writ of Summons via its solicitor Messrs. Krish Maniam & Co. (“KSB Solicitor”).

3.         The reasons for the default in payment.                         

The Company had intended to restructure the facilities through its previously announced Corporate exercise which entailed a subscription issue and right issue (“Proposals”) as per announcement dated 2 December 2019 and 6 January 2020.  The Company had at that time engaged in discussions with all its bankers including ABMB.  However, given the recent departure of the previous subscriber as per announcement dated 3 June 2020, the previous proposed settlement efforts had lapsed accordingly resulting the Company in this default in payment position.

4.         The measures by the listed issuer to address the default in payment.                    

Despite the termination of the Proposals as per the Company’s announcement on 3 June 2020, the Company is concurrently putting together a new corporate proposal with other potential investors, which shall be in line with the previous Proposals. This new proposal shall holistically address the outstanding balances with all its bankers, ABMB included, creditors (trade and non-trade) alongside additional working capital to further strengthen the Company cash flow position.  The Company expects to make the requisite announcement in the coming weeks once the new proposal crystallises.

5.         The legal implications of the default in payment including the extent of the listed issuer’s liability in respect of the obligations incurred under the agreements for the indebtedness.

KSB Solicitor, KMC has advised the Company to file the necessary defense of the Writ of Summons and to proceed with a counterclaim.  KMC has given its legal opinion that the probability of success is fair for both in establishing the defence and the success of the counterclaim.

6.         The business, financial and operational impact of the default in payment on the listed issuer.           

The Company wishes to reaffirm that it has sufficient working capital cashflow to manage its current operations, as well as payment obligation to its creditors.  In regards to the default in payment to ABMB, the Company is of the view that there shall be no significant impact on the business, both financially and operationally with inclusion of the new corporate proposal which currently being formulated. In the meantime, the Group shall endeavour to engage with the lenders for their continuous support.

7.         In the event the default in payment is in respect of secured loan stocks or bonds, the lines of action available to the guarantors or security holders against the listed issuer.                       

Not applicable.

8.         In  the  event  the  default  in  payment  is  in  respect  of  payments  under  a  debenture,  to  specify whether the default in payment will empower the debenture holder to appoint a receiver or receiver and manager.                        

9.         Whether the default in payment constitutes an event of default under a different agreement for indebtedness (cross default) and the details for such other default, where applicable.                   

   Not applicable.        

10.       Where the default  in  payment  is  in  respect  of  a  subsidiary  or  associated  company,  a confirmation  as  to  whether  the  subsidiary  or  associated  company  is  a  major  subsidiary  or major associated company, as the case may be.                             

             KSFI is a major subsidiary of the Company.        

11.       Where the default in payment is in respect of a listed issuer, major subsidiary or major associated company, as the case may be, a statement as to whether the listed issuer is solvent.                  

Notwithstanding the above default, the Company is of the view that it is still solvent as its current cashflow position is healthy with sufficient working capital to support its operations going forward.

This announcement is dated 25 June 2020.