JKN Global Group Public Company Limited (SET: JKN) addressed the public of serious concerns over the company’s financial status of not being able to fully pay the debt to its debenture holders, saying the company is confident in its business and intended to fulfil its obligations to creditors.
JKN announced that it will be able to pay THB 156 million to its debenture holders of JKN239A Debenture from a total of THB 610 million that will mature on September 1, 2023, leaving an outstanding balance of THB 443 million.
The share price of JKN briefly hit the limit down 30% right after the opening bell and traded near the limit throughout the session.
The THB 600 million debenture is the last series of this year, but that is just the tip of an iceberg. According to the financial statement as of 30 June 2023, JKN had THB 1,771 million of the current portion of long-term debt in which Net Accounts Payable was THB 1,431 million. Meanwhile, Debt to Equity ratio was at 1.55x. The company had Cash And Cash Equivalents of THB 112 million at the end of the second quarter, while net profit was at THB 121 million.
No wonder that this kind of event occurred.
Mr. Jakkaphong Jakrajutatip, Chief Executive Officer of JKN, stated in a press release that the company intends to fully pay its debt and the company still has strong growth as well as net profit. Moreover, the company is expected to realize an income of THB 400 million, while its sales on the content segment still shows solid expansion. Thus, Mr. Jakrajutatip reaffirmed that JKN is confident in its ability to repay its debt within this year.
JKN noted that it does not adopt a lax stance in relation to the default pertaining to the partial repayment of principal. Over the preceding period, the company has considered various sources of funding. However, the negotiations with relevant partners have failed to reach outcomes in line with the company’s expectations.
However, the negotiations with relevant partners have failed to reach outcomes in line with the company’s expectations. In this regard, the company confirms and reiterates its commitment, underpinned by unwavering trust, to the intention of effecting the complete repayment of both principal and interest attached to the JKN239A Debenture, alongside any other debentures issued by the company.
However, when looking ahead, there are about THB 2,000 million worth of debentures for a total of four series to be matured next year in which some are included in the current portion of long-term debt as of 30 June 2023. Two more series worth a total of THB 680 million will meet their maturity date in 2025.
It remains to be seen how well JKN will perform throughout the year after this hiccup. The first step is to clear the air with debenture holders and fully settle its obligations within the time frame.
Investors will be watching closely next year in which the date for the first maturity debenture is on 15 March 2024, totaling THB 300 million.