Company Name: KOBAY TECHNOLOGY BERHAD
Stock Name: KOBAY
Date Announced: 20 May 2016
Category: General Announcement for PLC
Reference Number: GA1-20052016-00042
Type: Announcement
Subject: OTHERS
Description: Banking Facilities accepted by Kobay
Pursuant to Chapter 9.04(e) of Listing Requirements, the Board of Directors of Kobay Technology Bhd. (“Kobay” or “the Company”) wishes to announce that on 20 May 2016, the Company has accepted the following banking facilities offered by Messrs. Alliance Islamic Bank Berhad to finance the working capital and land acquisition for the Group’s property development business that approved by the bank from time to time.
| Type | Amount (RM) | Interest Rate | Repayment Term |
| Cashline Facility-i 1 (CLF-i 1) | RM15,000,000 | BFR+0% per annum | The loan principal will be reduced by RM125,000 per month for a period of 120 months commencing one year after the date of first disbursement. |
| Cashline Facility-i-2 (CLF-i-2) | RM 4,992,000 | BFR+0% per annum | To be fully settled at end of the financing tenure (ie : 5 years from facility effective date) |
| TOTAL | RM19,992,000 |
CLF-i – 1 : for acquisition of land
CLF-i – 2 : for working capital
BFR : Currently at 6.82% p.a.
The cashline facilities are to be secured by Facilities Agreement to be stamped as Principal Instrument, All Monies Legal Charged over a single storey factory with double storey office block held under PN5918, Lot 12383, Mukim 12, Daerah Barat Daya, Negeri Pulau Pinang bearing postal address of Plot 30 Hilir Sungai Kluang 1, Bayan Lepas Industrial Park, Phase 4, 11900 Penang and any other supporting documents and/or security documents as required by the Bank and/or the Solicitors.
The land parcels financed under CLF-i-1 shall not be charged to other banks or financial institutions or other parties during the subsistence of the Financing Facilities without written consent from the Alliance Islamic Bank. If bridging financing is required, the Bank shall be given the first right to provide the financing or a prior written consent from the Bank is needed if obtain from other banks.
The risks associated with the cashline facilities are Interest Rate Risk (IRR), Credit Risk and Liquidity Risk. Kobay is subject to IRR when interest rates change which may affect the Company’s bottom line. The Company’s credit risk is, in part, determined by its debt to equity ratio as rising interest rates increase the required interest payment. This increases the overall credit risk of the Company, which, in turn, causes bankers to raise interest rates on new borrowings. Liquidity risk is the risk to the Company’s financial condition arising from its inability to meet its contractual obligations.
This announcement is dated 20 May 2016.