The Company Is Declared as Pn4 Companies by Bmb, What Strategies Would You Implement to Get the Advantage of Trading on the Stock Market.

Table of contents

Introduction………………………………………………………………………3

Theoretical Overview

Overview of Company de-listed……………………………………….4

Why and How do company fails……………………………………....7

Restructuring …………………………………………………………………….8

Financial Restructuring……………………………………………….10

Asset Restructuring…………………………………………………...12

Governance Restructuring………………………………………….....13

Determinants of various forms of restructuring……………………....15

Conclusion………………………………………………………………………..17

References………………………………………………………………………..19

Introduction

Company listed under PN-4 by BMB, Bursa Malaysia Berhad, is same as saying a company suffering from financial distress. Financial distress occurs when a company can not meet its obligations or has to restructure its debt to avoid default. BMB has set up Practice Note 4/2001 (PN4) in order to have separate classification for financially distressed companies. A financially distressed company will be de-listed under PN-4 company if it fails to regularize its financial condition within the period predetermined by Bursa Malaysia. From the period of 2002 to 2004, 67% of PN4 companies have successfully implemented their restructuring plans.

This study attempts to investigate some of the issues that may cause a company to fall into that category, also some strategies that can be implemented for companies emerging from financial distress in order to gain back the advantage of trading in the stock market.

Research Question

• Why do firms get listed under PN4?

• What makes a firm vulnerable to a point of failing to stay on stock market?

• What are the driving forces of restructuring a firm in financial distress?

Research objectives:

• To understand why firm fails and the impact it causes on the firm as a whole

• To highlight on strategies that can be implemented for a firm and get back on the stock market

• To overlook on the overall requirements...