Oilcorp down; company fails to meet interest payment due

PETALING JAYA: Oilcorp Bhd’s share price fell after the company failed to meet its interest payment of RM1.6mil due and payable last Thursday.
The stock was one of the most heavily traded on the stock exchange. At 2.45pm, the shares were down 5.5 sen, or 17%, to 26 sen.
The stock has resumed trading today after the shares were halted from trading last Friday. The interest payment is part of the facility agreement between EON Bank, Capone Bhd and Oilcorp under a primary collateralised loan obligation (CLO).
In a filing to Bursa Malaysia, the company said it did not have sufficient funds to settle the interest payment as the receipt of certain large receivables was delayed.
“The company has on Sept 15 written to Malaysian Trustees Bhd to seek indulgence of time of up to one month from the due date to remedy the matter,” Oilcorp said, adding that the lender and trustee had yet to declare Oilcorp to be in default under the facility agreement.
If such a notice were served to Oilcorp to declare the default, then the CLO is to be immediately due and payable together with the accrued interest, it said.
While such default would impact business, financial and operations of Oilcorp, it expects to resolve the issue within the indulgence period if granted, and is pursuing the payment of receivables.
The company is taking legal advice as to whether such a default constitutes an event of default under any other loan agreements.
“As the circumstances today, the directors are unable to form an opinion that the company will be able to meet its debts as they fall due and accordingly the company is not solvent,” Oilcorp said.