KUALA LUMPUR (July 5): Practice Note 17 (PN17) company Seacera Group Bhd has defaulted on another loan, this time to the tune of RM31.82 million owed to Small Medium Enterprise Development Bank Malaysia Bhd (SME Bank), it said today.

SME Bank had previously stated it will commence legal action against Seacera, including winding up proceedings, if it fails to settle the debt. 

“The company is currently seeking legal advice and any material development will be announced in due course,” said the ceramic tiles manufacturer in a filing today. 

The money owed represents the total amount outstanding and due payable under the Bank Guarantee (Kafalah) and Commodity Murabahah Revolving Financing-i (CMRF-i), which was owed by Seacera’s 20% associate firm SPAZ Sdn Bhd to SME Bank. 

Seacera is the corporate guarantor for the facilities, according to previous filings. 

At the beginning of the year, Seacera had planned two fund-raising exercises to pare down its debts, including a private placement to raise up to RM24.64 million, of which RM20 million would be used to repay its bank borrowings.

However, Seacera had failed to obtain written agreements from all 28 of its creditors to extend the deadline for the settlement agreements, forcing it to abort its fund-raising plans.

On April 26, 2019, Seacera announced it had defaulted on payment of principal and profits to AmBank Islamic Bhd, totaling RM253,451.23 — part of its total outstanding facilities of RM22.15 million to AmBank.

This, together with its failure to provide a solvency declaration to Bursa Malaysia Securities, triggered the PN17 status in April.

Seacera had earlier warned its shareholders on April 18, that the group is potentially headed towards defaulting its loans and will create a cross default on all its outstanding banking facilities and corporate guarantees of the banking facilities.

“In such an event, the board envisages that the company’s share price is expected to be negatively impacted,” the company had said. 

Shares of Seacera closed unchanged at 20 sen apiece today, giving it a market capitalisation of RM94.93 million.