GPERAK-AnnualReport2009 (1MB).pdf - Bursa Malaysia

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annual report 2009 | Gula peraK BerHaD (8104-X)
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
27. REDEEMABLE CONvERTIBLE SECURED NOTES (RCSN) 2003/2008
The Group and
The Company
2009 2008
RM’000 RM’000
RCSN issued in April 2003 287,335 287,335
Less: Liability component (256,562) (256,562)
Equity component 30,773 30,773
The issuance of RCSN has been accounted for in accordance with FRS 132. On issuance of RCSN which contains both a
liability and equity element, the fair value of the liability portion is determined using a market interest rate for an equivalent
financial instrument. This amount is carried as a liability until extinguished on conversion or maturity of RCSN. The remaining
proceeds are allocated to the conversion option which is recognised and included in shareholders’ equity.
The RCSN was issued by the Company on 23rd April, 2003 and a prospectus was issued in respect of a Restricted Offer for
Sale of the RCSN to the shareholders of the Company on 26th May, 2003. The Debt Restructuring Scheme of the Company
was completed on 15th July, 2003 and accordingly the RCSN was listed on this date.
The RCSN is secured by legal charges over the Company’s inventory of certain completed development properties (Note
20), land held for property development and development expenditures (Note 13) and its subsidiary companies’ hotel
properties and investment properties (Note 14 and 15).
The RCSN has a coupon rate of 6% whereby the coupon payments for the first three (3) years are being paid upfront through
the issuance of additional RCSN to the Lenders and are payable in cash on the fourth (4th) and fifth (5th) anniversary dates of
the RCSN. The coupon payments for the first three years of RM54,190,684 have been included as part of the restructuring
cost of the Company and have been accordingly charged to the income statements of the Group and the Company for the
financial year 2004.
In the 2006, RM1,486,189 RCSN were converted into ordinary shares. Consequently, the fair value of the liability portion has
been recomputed and as a result, the equity portion has been reduced from RM57,895,000 to RM30,773,000.
On 23rd April, 2007, the Company announced that the Company intends to vary the terms of the RCSN issued by the
Company (“Proposed Variations”) which inter-alia, will address the Company’s default in payment of the coupon of the
RCSN amounting to RM17,240,000 due on 22nd April, 2007.
On 24th April, 2008, the Company announced that the maturity date of the RCSN had set in on 22nd April, 2008 and that
the adjourned RCSN Holders meeting be adjourned sine die. Hence, the special resolution on the Proposed Variations of
the RCSN to be contemplated at the adjourned RCSN Holders meeting cannot be implemented.
On 12th May, 2008, the Company had utilised the cash in the Sinking Fund Account amounting to RM8,709,108 as
distribution to the RCSN Holders as part payment towards the RM17,240,000 coupon outstanding as at 22nd April 2007.
Coupon payments are instituted under the Trust Deed and are valid for the term of the RCSN which expired on 22nd
April, 2008. Redemption and coupon payments were supposed to be made at the maturity date of the RCSN. The RCSN
are secured against assets of the Group under the Trust Deed and the RCSN Holders are entitled under the Trust Deed to
initiate recovery of the amounts outstanding through the security assets charged to the RCSN. Presently, the negotiation on
the Proposed Restructuring of the RCSN with the RCSN Holders is still ongoing.