HIGH5

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PRACTICE NOTE 17 / GUIDANCE NOTE 3: REGULARISATION PLAN

HIGH-5 CONGLOMERATE BERHAD

Type	Announcement
Subject	PRACTICE NOTE 17 / GUIDANCE NOTE 3 REGULARISATION PLAN
Description	HIGH-5 CONGLOMERATE BERHAD (“HIGH-5” OR “COMPANY”) PROPOSED CAPITAL REDUCTION; PROPOSED CONSOLIDATION; PROPOSED SHARE PREMIUM REDUCTION; PROPOSED DEBT SETTLEMENT; PROPOSED RIGHTS ISSUE WITH WARRANTS; PROPOSED ISSUANCE OF SECURITIES PURSUANT TO THE INTERIM FUNDING; PROPOSED ISSUANCE OF SECURITIES PURSUANT TO THE SECOND INTERIM FUNDING; PROPOSED M&A AMENDMENT; PROPOSED LIQUIDATION OF SUBSIDIARY COMPANIES; AND PROPOSED ESOS (COLLECTIVELY REFERRED TO AS THE “REVISED PROPOSED REGULARISATION PLAN”) (All definitions used herein shall have the same meanings as the words and expressions defined in the announcements dated 21 February 2014, except where the context otherwise requires or where otherwise defined.)
We refer to the Company's announcement on 21 February 2014 in relation to the Revised Proposed Regularisation Plan. On behalf of the Board of Directors of High-5 (“Board”), Inter-Pacific Securites Sdn Bhd (“IPS”) wishes to announce that after due consideration of all facts and circumstances, Bursa Malaysia Securities Berhad (“Bursa Securities”) has decided to reject the Company's Revised Proposed Regularisation Plan as the Revised Proposed Regularisation Plan does not comply with Paragraph 3.1(a) of Practice Note 17 of the Main Market Listing Requirements of Bursa Securities (“MMLR”) (“PN17”) which specifies that the regularisation plan must be sufficiently comprehensive and capable of resolving all problems, financial or otherwise that had caused the Company to trigger the Prescribed Criteria (as defined in the MMLR). In deciding to reject High-5’s Revised Proposed Regularisation Plan, Bursa Securities has considered, amongst others, the following: (i) As part of the Revised Proposed Regularisation Plan, High-5 and its subsidiaries ("High-5 Group") would continue to rely on its existing business to turnaround the Company's financial condition. It is noted that the Company had since 29 February 2012 implemented certain turnaround strategies that forms part and parcel of the Company's Revised Proposed Regularisation Plan including streamlining of operations, introduction of new products and an interim fund raising by a subsidiary of High-5. Nevertheless, High-5 Group continues to register losses for the financial year ended 31 October 2013 as well as for the 6-month financial period ended 30 April 2014, resulting in 9 consecutive quarters of losses since triggering the criteria of PN17. In light of the continuing losses, the Company and its Principal Adviser have failed to address to the satisfaction of Bursa Securities on the ability of the Company's Revised Proposed Regularisation Plan to comply with the requirements of PN17, in particular with paragraph 5.2 (c) of PN17, which requires the Company to record a net profit in two (2) consecutive quarterly results immediately after the completion of the implementation of the plan. Further, the Company and its Principal Adviser have not demonstrated to the satisfaction of Bursa Securities on the ability of the Revised Proposed Regularisation Plan to generate, sustain and grow the revenue and profitability of the core business of the High-5 Group in the future; (ii) Lack of certainty on the Company's ability to continue the operations of its manufacturing facilities at its existing location and to relocate its manufacturing facilities to a new site as well as the ability to raise further funds from the interim funding arrangements for its operations, which may hamper the Company's plans to turnaround the financial condition of High-5 Group; and (iii) High-5 Group's accumulated losses stood at RM378.3 milion as at 31 October 2012 will be reduced to approximately RM24.8 million based on High-5's Revised Proposed Regularisation Plan. However, it is noted that based on the latest financial results as at 30 April 2014, the accumulated losses of High-5 Group stood at RM450.13 million. In view of the latest financial position of High-5 Group, it is uncertain on the ability of the High-5 Group to fully eliminate the accumulated losses under the Revised Proposed Regularisation Plan in the near future. The securities of the Company shall be removed from the Official List of Bursa Securities on such date as may be specified by Bursa Securities, subject to the Company’s right to appeal against the rejection of the regularisation plan pursuant to Paragraph 8.04(4) of the MMLR. The Board will deliberate on the next course of action and will make the relevant announcement in due course. This announcement is dated 6 August 2014.

Announcement Info

Company Name	HIGH-5 CONGLOMERATE BERHAD
Stock Name	HIGH5
Date Announced	6 Aug 2014
Category	General Announcement
Reference No	OS-140806-55819

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