HOE Leong Corp has said it has the financial resources to pay a US$920,000 sum owed to Otto Marine and that it can continue on a going concern basis.
"The board has reviewed the company's forecasts of financial performance for the financial year ended 31 Dec 2016 and considered the continuing support of its bankers as well as the financial support of its majority shareholder, Hoe Leong Co," said Hoe Leong in a release to Singapore Exchange on Friday.
It plans to file a defence against Otto Marine's petition, it added.
This comes after Otto Marine applied for a winding up of Hoe Leong for not being able to pay off debts owed. A sum of US$1.5 million was due for payment from Hoe Leong but it managed to pay only US$580,000 after "numerous reminders and/or demands", Otto Marine said on Thursday evening. Some US$920,000 remains outstanding.
In response, Hoe Leong said on Thursday the US$920,000 was the balance of a US$1.25 million payment that has already been settled.
"(The company has) delivered to Otto Marine 13 cheques for varying amounts totalling US$1.25 million," it said, adding that Otto Marine had accepted these cheques, and that the next cheque towards settlement of this sum is not due until Sept 1.
The hearing on the winding up application has been fixed for Sept 13.