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HOE Leong Corporation said on Thursday that the Singapore High Court has approved its application for a moratorium on creditors taking action against the company or its relevant subsidiaries.
The moratorium for Hoe Leong will be in place until July 31, 2018, while the moratorium for its relevant subsidiaries will be effective until Jan 31, 2018.
Hoe Leong had sought to stop creditors from taking any action as it is in the process of restructuring nearly S$80 million in debts owed to creditors.
The heavy equipment supplier last month proposed a scheme of arrangement to its bank creditors and its controlling shareholder, Hoe Leong Co. It owes around S$63 million to the banks, and S$14 million to Hoe Leong Co.
Under the scheme, Hoe Leong will restructure debts amounting to S$20.7 million into vessel loans and spare part loans to be repaid by the group.
The remaining S$56.3 million in debts will be "extinguished" through the allotment, issuance and distribution of new ordinary shares. The loans amounting to S$14 million granted by Hoe Leong Co will similarly be converted into new shares.
The scheme is subject to a number of conditions being met, including the approval by a majority or three-fourths in value of each class of scheme creditors casting their votes, as well as a court sanction.
In its bourse filing on Thursday, Hoe Leong said the scheme manager has received the ballot forms and proofs of debt from all the scheme creditors, and will complete the adjudication of the proofs of debt by Dec 14.
Hoe Leong said it will make a further announcement on the outcome of the vote once the adjudication process is finalised.