Beleaguered company Innopac Holdings announced that its wholly-owned subsidiary Awana Rentak has entered into a memorandum of understanding (MOU) with Malaysian developer Wanland Metro in relation to a joint venture to develop land in Tanjung Malim, Perak, Malaysia.

 

Awana Rentak currently owns 48.4 acres of industrial land in Tanjung Malim, which it has unsuccessfully tried to sell in the last two years.

 

Wanland Metro has proposed a joint venture in which the developer will develop the land at their sole expense into an industrial park,   whereupon Awana Rentak will be entitled to 30% of the gross revenue of the development.

 

The MOU is non-binding, with a legally binding joint venture agreement expected to be signed within 90 days of the MOU date.

 

Innopac, which is linked to John Soh Wee Chen and the penny stock saga, says that the proposed development is the best option given current market conditions for the land and Innopac&rsquo s &ldquo operating and financial predicament&rdquo .

 

In its filing to SGX on June 10, Innopac noted that it has been operating without funds, management and staff since August 2019 and is being overseen by the two current independent directors who were appointed then.

 

EMBATTLED Innopac Holdings has entered a non-binding memorandum of understanding to partially or fully acquire FEC Power, a manufacturer and supplier of cables to the power, telecommunications and automotive industries, from its parent company, FEC Cables.

 

The proposed acquisition is an attempt by its board to add a cash flow-generating business " that will ensure its viability and ability to operate as a going-concern" , the watch-listed company said in a Tuesday bourse filing.

 

Innopac' s shares were suspended from trading in June 2019, and it was handed a notice of delisting that month for failure to meet the bourse' s financial watch-list criteria.

 

Since August 2019, the company has been helmed by two independent directors who were appointed in the same month. Innopac said in its filing that it has been operating without funds, management and staff, while also defending claims from Saxo Bank and other creditors.

 

" The board is very aware of the challenges that it faces ahead. Efforts to monetise its existing assets has not been successful to date due to a confluence of adverse factors including the lack of internal resources, weak demand exacerbated by Covid-19 and the distraction of the Saxo Bank ongoing legal suit," it said.

 

FEC Cables has proposed to provide a profit guarantee to Innopac of RM20 million (S$6.4 million) profit before tax per annum for three years for the FEC Power. This guarantee will be adjusted pro-rata in the event of partial acquisition.

 

Innopac' s continued operations as a going concern status is dependent on the proposed acquisition, it said.

 

INNOPAC Holdings has clarified that its application to be placed under judicial management has been dismissed as a result of an unsuccessful application to adjourn the court hearing for the application.

 

The mainboard-listed company made this clarification in a bourse filing on Saturday following an update on Feb 24, when it only said that its application to adjourn the court hearing for the judicial management application was unsuccessful.

 

Innopac also noted on Saturday that the company can &ldquo resubmit a fresh judicial management application in the future if the situation requires&rdquo .

 

The troubled investment holding company applied last August to be placed under judicial management. 

 

Innopac was served a delisting notice in 2019 after failing to meet the necessary requirements to remove itself from the Singapore Exchange&rsquo s watch-list over the past 36 months.

 

However, the company later announced that it had insufficient cash resources to make an exit offer to shareholders. 

 

For FY2019, Innopac had recorded a net loss of S$3.8 million, versus S$8.6 million in the previous year. 

 

Revenue for the year stood at S$59,000, down 56.6 per cent from S$136,000 a year ago, due to exchange differences on foreign operations translation and absence of gains from trading of marketable securities, along with lower rental income of investments.

 

In 2019, Innopac faced claims of nearly S$14.7 million, over the negative account balances of two subsidiaries, from Saxo Bank. The company later appointed its solicitors to contest the claims and proceed with a counterclaim against Saxo Bank.

 

That year, a memorandum of understanding for a proposed joint venture to explore the development of a land parcel in Malaysia into an industrial and recycling hub was terminated as well.

 

Then in 2020, Innopac received a notice of demand from a lender for S$943,532. The company said then that it was &ldquo reviewing and verifying&rdquo the notice of demand. 

 

Innopac shares have been suspended since June 7, 2018.