Announcement Details :
a)
The date of the default is 10 December 2009. b)
The Company’s indirect wholly-owned subsidiary, Straight A’s Portfolio Sdn. Bhd., is unable to redeem the outstanding MUNIF Note totaling RM24,000,000.00 on the redemption date of 10 December 2009. c)
The measure by Oilcorp to address the default is to formulate a restructuring plan to regularise its financial condition. The Company will appoint a Principal Adviser to assist in formulating the restructuring plan.
d)
The legal implication of the default is that OSK Trustee Berhad (“Truestee”) may at its discretion and shall if instructed by the MUNIF Noteholders by Special Resolution, declare an Event of Default, and may declare by notice in writing to SAP that notwithstanding the maturity dates stated on the MUNIF Notes, the face amount of all outstanding MUNIF Notes together with all sums payable to the MUNIF Noteholders, shall become immediately due and payable. The total face amount of all outstanding MUNIF Notes is RM80,000,000.00 and this includes this particular MUNIF Note of RM24,000,000.00.
e)
Such a default will have an impact on the business, financial and operational aspects of the Company in so far as it relates to the securing of new contracts or raising finance for new projects.
Having said that, with the support of the stakeholders in the company, its bankers and other creditors, the Company will continue to remain operational and make all efforts to complete its current contracts.
At the same time the Company will work towards achieving a restructuring of the Company and its debts. f)
The action available to the Lenders against the Company is to issue legal proceedings.
g)
There is a debenture executed by and between SAP and the Trustee. The Trustee may appoint a receiver when the security becomes enforceable upon a declaration of an Event of Default under the Trust Deed.
h)
The Company is seeking legal advice whether such a default does constitute an Event of Default under the agreements with other financiers. i)
The Default is in respect of SAP which is not a major subsidiary and is a special purpose vehicle incorporated for sole purpose of issuing RM200 million nominal value private debt securities on behalf of Oil-Line Engineering & Associates Sdn. Bhd. (“OLEA”), the immediate holding company under a trust relationship. OLEA is a wholly-owned company of Oilcorp. j)
As per the first Practice Note 1/2001 announcement on 18 September 2009, the directors are unable to form the opinion whether the Company is solvent and that whether the Company is able to pay its debts as they when they fall due over the next 12 months. As such, the Company had already made its first announcement pursuant to Practice Note 17/2005 of Bursa Securities’ Listing Requirements on 23 September 2009. This announcement is dated 14 December 2009.
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