Carotech defaults on debt obligations

Malaysian listed Carotech, a producer of biodiesel and palm oil nutrients, said it has defaulted on its principal and interest servicing in respect of certain banking facilities from financial institutions. The default arose mainly due to over-expansion of capacity, significant rise in working capital and inability to clear stocks due to curtailed demand arising from the poor economic conditions in Europe and the United States, the company said in a statement filed at Bursa Malaysia. Carotech said it has invested more than 300 million ringgit (US$93.52 million) over the past three and half years to increase its capacity from 18,000 metric tons per year (MTPY) to 120,000 MTPY to cater to increasing demand for both phytonutrients and oleochemical products. (July 2, 2010)