LEY Choon Group Holdings, an engineering firm in the midst of restructuring its debt with lenders, on Thursday said the Singapore Exchange (SGX) had rejected its transfer from mainboard to Catalist due to its ongoing debt restructuring plan and the impact on its 12-month working capital needs.
"The SGX-ST notes that the company's sufficiency of working capital for at least 12 months after the proposed transfer is dependent on whether the financial institutions will accept the debt restructuring plan put forth by the company," the company said in a regulatory announcement.
It added that it may re-apply to SGX for a transfer from the mainboard to the Catalist board after the debt restructuring plan has been finalised and accepted by the financial institutions.
Ley Choon on Oct 28 said it planned to transfer to Catalist in order to comply with the coming requirement that all mainboard-listed companies have a six-month average-weighted trading price of at least 20 Singapore cents. Ley Choon's current stock price hovers around four Singapore cents. Failure to meet the minimum trading price will earn it a spot on the watch-list and a three-year window to raise the share price sufficiently or face delisting.
On Dec 18, Ley Choon announced that SGX had rejected its transfer, without elaboration on the reasons. The company said then it had abandoned the plans to transfer to Catalist, and that it would consider other options.
A Business Times column published on Thursday argued that there should be better disclosure when SGX rejects transfers to Catalist.