Date: 29 May 2017

OTHERS APFT BERHAD (APFT OR THE COMPANY) DEFAULT IN PAYMENT PURSUANT TO PARAGRAPH 9.19A OF THE MAIN MARKET LISTING REQUIREMENTS (MMLR) OF BURSA MALAYSIA SECURITIES BERHAD (BURSA SECURITIES)


Type Announcement
Subject OTHERS
Description APFT BERHAD (APFT OR THE COMPANY) DEFAULT IN PAYMENT PURSUANT TO PARAGRAPH 9.19A OF THE MAIN MARKET LISTING REQUIREMENTS (MMLR) OF BURSA MALAYSIA SECURITIES BERHAD (BURSA SECURITIES)

1.         Date of default in payment

 The Company wishes to announce that Asia Pacific Flight Training Sdn Bhd (Company No. 534715-H)(In Receivership)("APFTSB"), an indirect wholly-owned subsidiary of the Company has defaulted in its repayment as follows :

Creditor

Description

Amount due

(RM)

Date of default

CIMB Factorlease Berhad ("CIMBFL")

Industrial Hire Purchase Agreement No. KL1/HA/121110387

482,109.93

28 April 2016

2.         Reasons for the default in payment

Insufficient of funds to service the Term Loans due to significant decline in business.

3.         Measures by the Company to address the default in payment

Upon the negotiation between CIMBFL and the Company, CIMBFL had via its letter dated 16 May 2017 agreed to accept the principal sum of RM482,109.93 as a full and final Settlement Sum of the amounts owing under the CIMBFL's Writ and Statement of Claim vide Kuala Lumpur Sessions Court Suit No. WA-B52NCC-998012/2016 payable in the following manner :

i) RM48,200.00 to be paid on or before 31 May 2017

ii) RM433,909.93 to be paid on or before 30 August 2017

As agreed above, the Company shall made the first payment of RM48,200.00 on or before 31 May 2017. The balance of RM433,909.93 is expected to be paid before 30 August 2017.

The Company has taken measures to restructure its operations by merging both the fixed wing and helicopter training which were located in 2 different locations (Ipoh and Kota Bahru) into its branch in Ipoh. The relocation of the said operation is not expected to have any material impact on the Company's operation and will enable a cost saving of approximately RM100,000 per month from rental expenses, overhead and other expenses. In addition, the Company is also in the midst of negotiating with several parties to rent out its idling flight simulators and aircrafts. As of to-date, the Company has rented out an aircraft with rental income of RM30,000 per day to generate new source of income.

In addition, APFT is also in the midst of negotiating with 3 potential buyers to dispose of 3 units of its obsolescence aircrafts for an estimated disposal consideration of RM1.2 million. The said negotiation is expected to be finalised by fourth quarter of 2017.

4.         The  legal  implications  of  the  default  including  the  extent  of  the  Company's liability  in  respect  of  the  obligations  incurred  under  the  agreements  for  the Indebtedness

CIMBFL had on 5 December 2016 issued legal notice to recall the loan for the loan facilities.

5.         The business, financial and operational impact of the default in payment

The default has no material impact on APFT.

6.         Whether the default in payment constitutes an event of default under a different agreement for indebtedness (cross default) and the details for such other default, where applicable

Not Applicable. 

7.         Whether the subsidiary company which has defaulted is a major subsidiary company

APFTSB is a major subsidiary of the APFT.

8.         Whether the Company is Solvent

The Board of Directors of the Company, after having inquired into the affairs of the Company, is of the opinion that the Company is able to provide Bursa Securities a Solvency Declaration pursuant to 9.19A(4) of the MMLR of Bursa Securities as the Company will be able to pay all its debts as and when they fall due within the period of 12 months from the date of this announcement.

This announcement is dated 29 May 2017.





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