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Nam Fatt drops 35% after triggering PN17

KUALA LUMPUR: Nam Fatt Corp Bhd shares skidded in active trade on March 16 after it was placed under Practice Note 17 of the Main Market listing requirements of Bursa Malaysia Securities Bhd.

It closed 6.5 sen or 35% lower at 12 sen with nearly 40 million shares done after falling to an intra-day low of 11 sen. Nam Fatt had failed to meet its principal and interest payment of RM13.22 million due and payable on Monday (March 15) following an asset sale agreement it had entered into on Dec 4, 2007, with Bank Kerjasama Rakyat Malaysia Bhd.

Nam Fatt will have to undertake a regularisation plan to be submitted within 12 months to the relevant authorities. It will also have to announce, within three months, whether the plan will result in a significant change in the business direction or policy of the company.

Nam Fatt faces trading suspension and the prospect of being delisted.

Meanwhile, Malaysian Rating Corp Bhd (MARC) on March 16 downgraded its ratings on Nam Fatt’s RM250 million Islamic commercial paper/Islamic medium-term notes programme to MARC-4ID/CID from MARC-3ID/BBB+ID. The ratings continue to be placed on MARCWatch Negative where it has been since Dec 30, 2009.

“The rating action was taken following Nam Fatt’s failure to meet its principal and interest payment of about RM13.2 million to Bank Kerjasama Rakyat on March 15, 2010,” it said.
MARC said the bank loan default would likely trigger an immediate demand for repayment on all its other credit facilities though it had yet to receive a notice from the trustee that Nam Fatt’s Islamic commercial paper (ICP) had experienced an event of default. Additionally, the trustee has yet to declare an acceleration of maturity.

The ratings agency also said Nam Fatt had outstanding ICPs of RM130 million, of which RM40 million and RM90 million were specifically used to fund Syarikat Perumahan Nasional Bhd’s (SPNB) low- to medium-cost housing project in Tumpat, Kelantan and Thailand’s National Housing Authority’s low-cost apartment project in Bangkok, respectively.

Of the outstanding ICPs, RM80 million is due on April 6, 2010.

This article appeared in
The Edge Financial Daily, March 17, 2010.
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