KUALA LUMPUR (Oct 6): Practice Note 17 (PN17) company Khee San Bhd has proposed to undertake a scheme of arrangement, including a minimum RM55 million fundraising exercise, to settle the group's RM138.47 million debt.

In a Bursa Malaysia filing, the candy manufacturer said the scheme of arrangement entails its creditors waiving 50% of the debt obligations, totalling RM69.23 million.

Of the remaining RM69.24 million, RM48.17 million is to be paid through cash payments — to be fuelled by a minimum RM55 million fundraising exercise to be determined later — while the other RM21.06 million is to be satisfied via the issuance of 210.61 million fully paid-up Khee San shares at 10 sen apiece.

Additionally, Khee San said another RM3 million of the proceeds from the fundraising exercise will fund a payment to KSFI's corporate guarantee creditors.

The PN17 company said it is currently in the midst of finalising the detailed terms of its regularisation plan which may include the fundraising exercise.

"An announcement in compliance with the relevant provisions of the Main Market Listing Requirements of Bursa Securities in relation to the regularisation plan including details on the regularisation plan will be made in due course upon the finalisation of the detailed terms of the regularisation plan," it added.

On Sept 23, Khee San said it had obtained an order from the High Court to proceed with the scheme of arrangement, and had a court-convened meeting with its creditors towards approving the scheme if considered fit.

Additionally, the court also granted the group a restraining order on proceedings against the group and its assets for a period of three months.

Shares in Khee San finished 1.5 sen or 15% lower at 8.5 sen on Thursday (Oct 6), giving the group a market capitalisation of RM11.14 million.