Serrano faces demand over guarantees for defaulting supplier

INTERIOR-DESIGN contractor Serrano's wholly owned subsidiary Serrano Holdings has received a letter of demand from Maybank in Vietnam for US$2 million and 32.4 billion Vietnamese dong (S$1.97 million) after a supplier defaulted on payments to the bank.

Those amounts comprise overdue principal amounts and accrued and penalty interests as at Aug 31, that stem from term loan facilities granted by Maybank to Sorrento Vietnam Shareholding Company, Serrano's major supplier, for which Serrano Holdings had provided guarantees.

Sorrento Vietnam is currently in negotiations with a potential buyer to dispose of a factory at the Vietnam-Singapore Industrial Park with the plan to use the proceeds to help discharge its credit facilities. There is no assurance that the negotiations will be successful, however.

Serrano said it is seeking professional advice on the matter.