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China Hongxing: Wrote off some overdue debt from almost all customers
CHINA Hongxing Sports said that 33 of 37 customers who contributed about 95 per cent of the company's revenues in the first nine months of 2017 have unpaid debt aged over six months that had to be written off.
In a reply late on Thursday night to queries by the Singapore Exchange (SGX) about its latest third-quarter earnings, the maker of sports apparel also said that it has negotiated for longer credit periods from several suppliers.
The SGX had requested the names of companies with debts aged over six months that were written off by China Hongxing. The company declined to reveal those names, but said that 33 of its 37 customers as at Sept 30 had some portion of their debt written off "for accounting prudence reasons".
Those customers who had debt written off accounted for about 95 per cent of sales in the nine months ended Sept 30.
The company said that it continues to trade with those customers because once trading ends, there will be no possibility of recovering the amounts owed.
"The company will continue to chase the payment and there is hope that they will pay but much later," China Hongxing said.
The SGX also sought an explanation for why trade payables increased when revenue decreased. China Hongxing replied that it had negotiated with several raw material suppliers for longer credit periods, and that settlement would be due by the end of 2017.
China Hongxing shares are currently suspended from trading.