Kenmark Industrial Co Case Study

Timeline

10.07.2010

KENMARK Industrial Co (M) Bhd (7030) said it could not quantify the full impact of the expected losses arising from the winding-up proceeding served by Export-Import Bank of Malaysia Bhd (Exim Bank) for non-payment of loans (appoint PWC). However, the immediate effect would be the loss on use of the credit facilities from the banks and a writedown on the cost of investment in the subsidiary to be wound up amounting to RM130 million.

Meanwhile, Kenmark has also defaulted on the banking facilities from RHB Bank Bhd. It has an unsecured credit facility of RM3 million from RHB and an outstanding amount of RM2.16 million as of June 14. This together with other defaults will have a material finan-cial and operational impact on the group, it told Bursa Malaysia.

Source: Business Times

July 6

James Hwang has surfaced in a UK newspaper, Evening Telegraph, where he was quoted to have said that his company would continue production of televisions. In an article dated July 6, Hwang had said: "I have never closed down the operations in the UK and I have no intention to close down the operations in the UK. The company is not subject to a winding-up order and no creditor has filed such an order. The company will continue production of televisions at Corby (in Northamptonshire, East Midlands, England).'' The company, based in Longeroft Way at the Eurohub in Corby, was reported to have laid off its temporary workers and closed its TV factory to all but the office staff.

Source : The Star, July 10, 2010.

9 a.m., Friday, 31 December 2010

Delisting of the entire issued and paid-up share capital of KENMARK from the Official List of Bursa Malaysia Securities Berhad

Source : Bernama News, dec 28

Based on announcements to Bursa Malaysia, BHLB Trustee Bhd, a trust for Ishak's family, scooped up 30 million shares or 16.83% stake in Kenmark on Tuesday(june 1st). A day later(june 2nd), he used another vehicle, Unioncity Enterprise Ltd to acquire 27 million shares or 15.53% of Kenmark, raising his stake to 32.36%, just shy of the trigger point for a mandatory general offer.

Based on Kenmark's share price over the two days of the acquisition, it can be assumed that he had acquired the shares at not more than 8 sen apiece. When trading on Kenmark's shares resumed on Friday, the counter shot up to 26 sen, a 126% gain from its last traded price of 11.5 sen. This means Ishak could be sitting on a paper gain of some RM10mil.

Domino effect

On Wednesday, after Hwang had "disappeared", the factory in Malaysia