This article first appeared in The Edge Financial Daily on April 3, 2019

KUALA LUMPUR: Scanwolf Corp Bhd plans to sell part of its property inventory worth about RM99.2 million to address a loan default by a major wholly-owned subsidiary, Scanwolf Development Sdn Bhd (SDSB), it said in a Bursa Malaysia filing yesterday.

SDSB had failed to repay an instalment of RM1.75 million on the due date of April 1. Its total outstanding borrowings is RM8.74 million. According to Scanwolf, SDSB had fallen behind on repayments as a sluggish property market affected sales.

Scanwolf will also work towards improving its cash flow by reducing unnecessary expenses, as well as submit a proposal to restructure the loan facilities with the financial institution, it said.

“There is no legal implication at this stage as no legal action has been taken by the financial institution against the group. The credit facilities are secured against, among others, certain assets of SDSB, guaranteed by the directors and [with a] corporate guarantee by Scanwolf,” it added.

“After inquiring into the company’s affairs, it opined that the company will be able to pay all its debts as and when they fall due within 12 months from the date of this announcement,” Scanwolf’s board of directors said.

“Accordingly, the company will provide the Solvency Declaration to Bursa Malaysia Securities Bhd within three market days from the date of this announcement,” it added.

Scanwolf shares, suspended for an hour from 9.09am yesterday, fell 2.5 sen or 14.3% on resumption of trading to 15 sen.