KUALA LUMPUR (May 6): Flexible packaging company Tomypak Holdings Bhd (KL:TOMYPAK) said its wholly-owned unit has defaulted on certain loan repayments to multiple lenders amid a temporary mismatch in cash flow.

The default by Tomypak Flexible Packaging Sdn Bhd (TFP) involves principal and interest payments under trade facilities from AmBank Bhd and Hong Leong Bank Bhd (KL:HLBANK), as well as industrial hire purchase facilities from MBSB Bank Bhd and ORIX Leasing Malaysia Bhd.

Tomypak, in its exchange filing on Wednesday, did not disclose the amount in default.

“TFP is unable to meet the above payment obligations mainly due to a temporary timing mismatch in the company’s cash flow, pending the completion of funding initiatives currently being progressed by the company,” said Tomypak.

TFP manufactures flexible packaging materials for food and beverage companies across domestic and export markets, and operates from its main plant in Tampoi, Johor with an annual capacity of about 30,000 tonnes, according to Tomypak's annual report.

On Wednesday, Tomypak said it is engaging with lenders to regularise the arrears while advancing funding plans, including a proposed financing arrangement and a 10% private placement announced on April 29 to raise up to RM8.62 million for working capital.

It also expects near-term collections from trade receivables to partially settle the outstanding amounts.

However, Tomypak cautioned that failure to regularise the defaults may prompt lenders to initiate legal action and enforce securities, including fixed charges over assets and shares in its subsidiary.

Despite this, the group said the defaults are not expected to have an immediate material impact on operations. But prolonged delays could weigh on its financial performance and liquidity position.

For the financial year ended June 30, 2025, the group narrowed its net loss to RM19.26 million from RM22.33 million the previous year, as revenue grew 40.72% to RM216.77 million from RM154.04 million.

As at end-June 2025, the group had cash and cash equivalents of RM8.5 million against RM79.93 million in total borrowings.

On Wednesday, shares of Tomypak closed up half a sen or 3.57% at 14.5 sen, valuing the group at RM62.51 million.