KUALA LUMPUR  (Dec  31 ) –  Integrated Rubber Corp Bhd (IRCB) fell to its lowest since its listing some 40 years earlier after regulators placed the rubber glove manufacturer under the Practice Note 17 (PN17) category due to the company’s failure to service its debt obligations.

The company had started its share plunge last week after the news was out.

At 12.30pm, IRCB, the most-active entity, ended at eight sen with some 25 million shares done after falling as much 0.5 sen or 7% to 6.5 sen earlier. This is the lowest since the company’s listing on December 29, 1973, according to Bloomberg data and IRCB’s website.

Since IRCB’s listing, the stock had traded at a high of RM64.29 on December 31, 1993. At its latest price of eight sen, the stock had declined 53% so far in 2012, underperforming the FBM KLCI’s  10% advance.  

IRCB trades at a 27% discount to its latest reported net assets per share of 11 sen, according to the firm’s quarterly financials.

A dealer said investors could be accumulating IRCB shares after the stock was battered down on updates that the company has been placed under the PN17 category.

The dealer said it may take some time for IRCB be lifted out from its PN17 status, and that gains seen in the stock on Monday could be due to short-term speculators placing their bets on shares of IRCB.

"Investors could be buying IRCB shares on speculation," the dealer told theedgemalaysia.com over telephone.

Meanwhile, IRCB warrants, the fourth most-actively traded entity, added as much as 0.5 sen or 25% to close at 2.5 sen with some 14 million units done at lunch break.

IRCB told the exchange last week that Malayan Banking Bhd (Maybank) had a day earlier recalled loan facilities given to the company ‘s wholly-owned subsdiary Comfort Rubber Gloves Industries Sdn Bhd (CRG) with immediate effect.

Maybank had recalled the loan facilities after CRG defaulted on RM64.2 million worth of debt obligations by the lender, according to IRCB.

As the defaulted sum is more than 5% of the net assets of IRCB, Bursa Malaysia had placed IRCB under the PN17 category due to the company's financial condition.

IRCB said it is "managing its existing business with limited financing resources" and that the company is in talks with its two other lenders AmBank (M) Bhd and CIMB Bank for a "stand-still arrangement".

The loss-making rubber glove manufacturer said it is also talking with "strategic partners" which may inject capital into the company.  IRCB had made a cumulative net loss of RM18 million in the nine months ended October 31 against a net loss of RM17.93 million  a year earlier.

As at October 31, IRCB net debt stood at RM24.83 million based on its cash of RM45.08 million and debt obligations of RM69.91 million, its balance sheet shows. For now, IRCB which does not have a formal regularisation plan to rejuvenate its financials yet, said it intends to come out with one to repair its balance sheet.

The company said it will keep the investment fraternity updated on the company’s progress.

News reports last October had indicated that IRCB may be a takeover target as larger rubber glove manufacturers expand via mergers and acquisitions to expedite growth.

According to IRCB's website, the company formerly known as Berjuntai Tin Dredgging Berhad (BTD) was established March 31,1937, as a public company under the name Berjuntai Tin Dredgging Ltd before changing its name to BTD on April 15, 1966.

BTD was subsequently  listed  on December 29, 1973 on the Main Board of the then Kuala Lumpur Stock Exchange. BTD had adopted its present name (IRCB) since March 9, 2004.

This followed the group's diversification into natural and synthetic rubber glove manufacturing since 2003 via the acquisition of the entire stake in CRG from Chip Lam Seng Bhd then.