KUALA LUMPUR (May 21): PN17-status Multi Sports Holdings Ltd has entered into a Memorandum of Understanding (MoU) with construction firm Southern Score Sdn Bhd (SSSB) today which will entail the transferance of its listing status to a new entity to be set up by both parties, the company announced to Bursa Malaysia.

The MoU is part of a proposed restructuring plan by Multi Sports to regularise its financial position, which SSSB has shown interest to take part in.

Under the deal, Multi Sports will establish a new company (Newco) with SSSB that will take over the listing status of the company; undergo a capital restructuring if necessary; capitalise the accrued liabilities and debts owed by Multi Sports to its creditors; and the Newco will acquire the entire issued share capital of SSSB at a proposed price to be determined later through valuation, which will be satisfied through the issuance of Newco shares.

Shareholders of Multi Sports will become shareholders in the Newco, it said.

In consideration of the proposed restructuring, SSSB plans to issue up to RM15 million worth of Newco shares in the following manner:

i) Up to RM9 million worth of Newco shares to existing shareholders of Multi Sports which will be distributed according to the size of the stakes held by its shareholders at an entitlement date to be determined later; and

ii) Up to RM6 million worth of Newco shares as full and final settlement of the accrued debts and liabilities owed to creditors.

Both Multi Sports and SSSB plan to enter into a definitive agreement to implement the restructuring scheme no later than 30 days from the date of the MoU, unless an extension is mutually agreed upon.

The definitive agreement is contingent upon receiving the approval of Bursa Securities for an extension of time pursuant to Practice Note 17/2005 for the submission of the regularisation plan by the company, and the approval in principle from its creditors.

“In the event that any of the Approvals is rejected or shall not have been given or obtained by the Cut-Off Date (or such extended time period as the parties may mutually agree), this MOU shall forthwith lapse and be of no further effect and neither party shall have any claim of whatsoever nature against the other party under this MOU,” it said.

Trading of Multi Sports shares were suspended at 2.58pm today.