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PETALING JAYA: London Biscuits Bhd is now a Practice Note 17 (PN17) company, following its payment default amounting to RM9.83mil to Bank of Nova Scotia Bhd.

According to a notification by Bursa Malaysia, London Biscuits has triggered the criteria pursuant to PN17 of the Main Market listing requirements of Bursa Securities.

In line with Paragraph 2.1(f) of PN17, London Biscuits had defaulted in payment and is unable to provide a solvency declaration to Bursa Securities.

“Bursa Securities would like to emphasise that it will continue to monitor the progress of London Biscuits in respect of its compliance with the listing tequirements,” it said.

The stock exchange regulator added that there were a total of 22 companies under the PN17 category as at July 9.

This represents 2.4% of the total number of 919 companies listed on Bursa Securities.

On July 3, London Biscuits had received a notice of demand from the bank after it had failed to pay the amounts due after the maturity dates under the facilities granted by the bank.

The default of the payment was on May 10.

London Biscuits said the failure to pay was due to cashflow constraint.

As of March 31, 2019, London Biscuits was in a negative cash position of RM15.17mil.

A year ago, the company had cash and cash equivalents amounting to RM50.75mil.

London Biscuits posted a net profit of RM10.87mil for the first half of the financial year ending September 30, 2019 (FY19), which doubled from the net profit during the same period of the previous financial year.

This was on the back of increased sales, which generated a revenue of RM230.62mil for the first half of FY19.

London Biscuits closed 8 sen lower to 16 sen, traded on a volume of 52.78 million shares.

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