Dolomite Corp Bhd has asked for a court management order that will allow it to implement a financial restructuring plan in order to avoid being wound up.
The application comes after it was served with a notice by the solicitors of Maybank International Labuan Branch over debts totaling US$38.19 million (RM160 million), plus RM13,520 in court costs.
The unpaid balance is about seven times the market capitalisation of Dolomite, which is currently valued at RM24 million.
Dolomite is an investment business that serves as the parent company for 14 subsidiaries engaged mostly in real estate development, construction, and sand mining.
The business stated in a report with Bursa Malaysia that it had net liabilities of RM59.574 million as of December 31, 2020.
According to Dolomite, the company is facing insolvency because it is extremely likely that it will be unable to repay its debts due to its liabilities exceeding its assets.
Additionally, it has been designated as an affected listed issuer pursuant to Practice Note 17.
In light of this, the company believes that filing the application for judicial management order will likely achieve one or more of the objectives set out in Section 405 (1)(b) of the Companies Act 2016, namely “the survival of the company, or the whole or any part of its undertaking, as a going concern; the approval under Section 366 of a compromise or arrangement between the company and its creditors.”
“Upon appointment of a judicial manager, the advice and expertise of an insolvency practitioner will be able to nurse the company’s financial health, giving the company a better chance of recovering all of its debts and/or increasing its efforts to reduce its debts, which will ultimately benefit all of the company’s creditors,” it added.
Dolomite’s shares finished steady at four sen today. The stock has decreased 67% year to date from 12 sen on January 4, 2021.
Published by Zack Baharum