KUALA LUMPUR: Transmile Group Bhd risks being delisted from Bursa Malaysia next Monday if it fails to file an appeal to Bursa Securities today after repeatedly failing to submit a regularisation plan in order to solve its debt woes running into half a billion ringgit.

The troubled air cargo operator tried to revive its financials but efforts do not seem to be reaping fruits.

The sale of the four MD-11 aircraft to Federal Express Corporation for US$68 million (RM207 million) last month was only enough to pare down 39% of RM528.9 million in outstanding debt obligations, leaving it with a balance of around RM320.1 million in debt obligations.

Based on its 4Q10 results, the group has long-term assets of RM121.2 million, and cash and cash equivalents of RM27.9 million. On the other hand, its shareholders’ fund has a deficit of RM147 million while total borrowings stood at RM531.5 million.

The group has continued to see net losses ever since a scandal was unearthed back in 2007, which saw inflated revenue of around RM625 million between FY04 and FY06.

Transmile share price lost its ground and tumbled to a historical low of 6.5 sen from 20.5 sen in the past four trading days. Interestingly, the trading volume soared above 18 million shares to a high of 32 million last Thursday.

Managing director Liu Tai Sin told The Edge last month that the target this year was to resolve all its debts woes so as to turn the company around as soon as possible.

“The next thing is to deal with the lenders, get a haircut and make the necessary proposals to them, and get the authorities to agree to our regularisation plan. How fast we resolve the outstanding debts depends on how proactive the lenders are to our proposals,” he said.

Transmile received another extension of 90 days on its restraining order last month for the group and its subsidiary Transmile Air Services. However, creditor Malaysian Trustee Bhd (MTB) is exempted from the restraining order. MTB filed a petition to wind up Transmile last year following failure to meet debt obligations of around RM105 million.

However, the group has yet to reach a consensus with its lenders regarding the restructuring of the remaining debt. The total debt, which it defaulted, is composed of a US$115 million syndicated term loan, a 1% guaranteed convertible bonds and a RM150 million medium term notes programme held under its subsidiaries.

Many investors bought Transmile due to its major shareholder, the Kuok group. Trinity Coral Sdn Bhd, controlled by Kuok group, holds 17.16% while Pos Malaysia Bhd owns 14.99%.

This article appeared in The Edge Financial Daily, March 2, 2011.