Matrix Concepts Holdings Bhd - How long will guarantees for subsidiaries and suppliers last?

19/11/2013 – Matrix Concepts is confident its revenue streams will be sustained through the launches of its current development projects.

The company recently announced earnings for Q2 FY13, its first as a listed company. Therefore, no comparative numbers were provided:

Revenue: RM 147.3 mln
Profit: RM 30 mln
Cash flow from operations: RM 65.2 mln
Dividend: 7 sen per share

Investor Central. Asian insights for global investors. We ask the tough questions of Asian companies which global investors need answers to.

Question

1. How long will the guarantees for subsidiaries and suppliers last?

On 26 August, Matrix Concepts announced it was providing financial assistance to two wholly-owned subsidiaries and a supplier.

It was providing corporate guarantees to a financial institution for RM 11 mln of facilities to BSS Development Sdn Bhd and RM 4.22 mln of facilities to Matrix Concepts Sdn Bhd.

It also provided a corporate guarantee of RM 18.5 mln to its supplier, Juwasan Trading Sdn Bhd.

Matrix Concepts said it did this so as to facilitate ordinary course of business.

Why were these companies unable to get credit facilities on their own?

These guarantees are a liability to the company, so how long will they last?

Question

2. How is it spending its IPO proceeds?

Matrix Concepts mentioned in its IPO prospectus that the proceeds from the IPO will be used as working capital.

How much money has been used as working capital so far?

(Total:4 questions)

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