KFM (8303) - Kuantan Flour Mills inks MoU with Lotus Essential
KUALA LUMPUR: Fresh off the retraction of interest by Felcra Bhd to explore possible participation in Kuantan Flour Mills Bhd (KFM) that sent its share price tumbling two weeks ago, the flour miller yesterday said it has inked a memorandum of understanding (MoU) with Lotus Essential Sdn Bhd, which includes a possible strategic investment.
According to a bourse filing yesterday, the MoU which sets out mutual understanding and intention of the parties to initiate the discussions to enter into agreements, will take effect from Dec 27 for six months.
“The parties are desirous to enter into a contract manufacturing and offtake agreement for the provision of flour milling activities by KFM to Lotus; and consider a strategic investment by Lotus into KFM,” the filing stated.
As part of its proposal to restructure its debt and reconstruct its business, KFM is proposing to carry out an equity fundraising exercise via a rights issue and special issue of its shares, and to cooperate as well as collaborate with Lotus to carry out flour milling activities and trading of flour and food-related products, it said.
Having taken into consideration of all aspects of the MoU, the company’s board of directors opined that the MoU is in the best interest of the company, it added.
Lotus is in the business of import, export and trading of steam coal, corn and tapioca starch.
To recap, KFM had earlier announced to Bursa Malaysia that it received a letter of interest from Felcra for a reverse takeover.
However, Felcra later retracted its interest in the corporate exercise without giving a specific reason after it expressed surprise at KFM’s earlier announcement of its interest.
Last Friday, shares in KFM continued falling, closing at eight sen.
Shares in KFM closed 1.5 sen or 20% higher at nine sen yesterday, giving it a market capitalisation of RM5.46 million.
KFM (8303) - Kuantan Flour Mills inks MoU with Lotus Essential
http://www.theedgemarkets.com/my/article/kuantan-flour-mills-inks-mou-lotus-essential
