Tatt Giap mulls more cor­po­rate mea­sures to im­prove fi­nan­cial con­di­tions

The Star Malaysia - StarBiz - - News - By M. HAFIDZ MAHPAR hafidz@thes­tar.com.my

KUALA LUMPUR: Tatt Giap Group Bhd, which made a loss in the last fi­nan­cial year and has re­ported fur­ther losses in the first quar­ter ended Aug 31, 2017 (Q1 FY17), is mulling more cor­po­rate ex­er­cises to im­prove its fi­nan­cial con­di­tions.

In its lat­est quar­terly fi­nan­cial re­port to Bursa Malaysia yes­ter­day, the stain­less steel pipe and tube man­u­fac­turer said the board was plan­ning sev­eral struc­tural mea­sures.

It said it was con­sid­er­ing a cap­i­tal re­duc­tion ex­er­cise to re­duce the com­pany’s ac­cu­mu­lated losses, a ven­ture into prop­erty devel­op­ment by de­vel­op­ing its ex­ist­ing land, and a fund-rais­ing ex­er­cise, which may in­clude rights is­sue, to fi­nance this prop­erty project.

Tatt Giap is al­ready im­ple­ment­ing a turnaround plan that in­cludes cost-cut­ting ini­tia­tives, as­set dis­pos­als and fund-rais­ing exer- cise to re­plen­ish work­ing cap­i­tal funds as well as re­pay bank bor­row­ings.

The com­pany said global steel prices were ex­pected to re­bound fol­low­ing the Chi­nese gov­ern­ment’s ini­tia­tives to curb steel pro­duc­tion over­ca­pac­ity, and do­mes­tic de­mand for steel prod­ucts was ex­pected to be sup­ported by the con­tin­ued growth in the Malaysian man­u­fac­tur­ing sec­tor.

“How­ever, the group can only ben­e­fit from the above men­tioned ex­ter­nal fac­tors if it can first over­come the in­ter­nal chal­lenges faced by its busi­ness op­er­a­tions.

These in­clude the clear­ing out of legacy in­ven­to­ries, high-fi­nance costs and short­age of work­ing cap­i­tal funds,” it added.

In the lat­est in­terim fi­nan­cial re­port, Tatt Giap an­nounced that it swung to a loss at­trib­ut­able to share­hold­ers of RM975,000 in Q1 FY17 from earn­ings of RM19.59mil a year ear­lier. (The re­sults in last year’s cor­re­spond­ing quar­ter were propped up by a one-off gain on dis­posal of as­sets of RM16.23mil.)

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