First Strike Call For Megan Media

My Dearest Moo Moo Cow,

Have a look at this announcement, ANNOUNCEMENT PURSUANT TO PRACTICE NOTE 1/2001

• In accordance with PN 1/2001, Megan Media Holdings Berhad ("MMHB or "the Company") wishes to announce that its subsidiaries, Memory Tech Sdn Bhd ("MTSB") and MJC (Singapore) Pte Ltd ("MJC"), have defaulted on maturing trade facilities amounting to RM47,362,332.46.
  
  Introduction
  
  On 27 April 2007, MTSB and MJC ("the Borrowers") were unable to meet these debt obligations and by 30th April 2007, it was established that further impending maturities are also unlikely to be paid.
  
  1. Reason for default.
  
  MTSB and MJC are experiencing financial difficulties as a result of constraints on its current cash flow from its operations which are insufficient to service and repay amounts due to lenders. Principally, this has been due to an exceptional build-up of its trade debtors.
  
  2. Measures taken to address the default.
  
  The Company has appointed a suitably qualified Deputy CEO and specialist advisory team to support an investigation into the underlying causes of default and, if necessary, to formulate and initiate a comprehensive debt restructuring process. This will likely entail meetings with regulatory authorities, lending institutions, rating agencies, trustees and other relevant parties as well as appointment of an appropriate investment bank, accounting and legal firms to facilitate the due process.
  
  3. Financial and legal implications in respect of the default in the payments.
  
  These defaults are only just unfolding and the lenders have not called an event of default. The company will be advising all Lending Institutions on the current situation and the proposed course of action.
  
  4. In the event the default is in respect of secured loan stocks or bonds, the lines of action available to guarantors or security holders against the listed issuer.
  
  Not applicable.
  
  5. In the event the default is in respect of payments under a debenture, to specify whether the default will empower the debenture holder to appoint a receiver or a receiver and manager.
  
  Not applicable.
  
  6. Whether the default in payment constitutes an event of default under a different agreement for indebtedness (cross default and the details thereon, where applicable).
  
  The defaults could constitute a technical default on banking facilities granted by other lenders to the Group. This is presently being assessed by the Company in consultation with their lawyers.
  
  7. Declaration of Solvency
  
  Based on standard accounting principles and practices, the Company remains in a state of solvency. However, the Company shall consult its auditors for further inputs prior to providing a Solvency Declaration within 3 business days from the date of this announcement. At this early stage of enquiry and investigation, it is difficult to be conclusive on this issue.
  
  By order of the Board
  
  This announcement is dated 4 May 2007.