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Singapore eDevelopment faces S$2.8m payment demand from COFACE
Singapore eDevelopment Limited said it has been informed by Compagnie Française d'Assurance pour le Commerce Extérieur (COFACE), an insurance company and issuer of a performance bond guaranteed by the group that HDB has demanded payment of S$2.8 million by COFACE under the performance bond.
This performance bond was issued in relation to the building works at Jurong West Neighbourhood 2 Contract 19 undertaken by CCM Industrial Pte Ltd (CIPL), a previously wholly-owned unit that was disposed off in May last year.
COFACE has demanded payment from CIPL by June 15. The demanded sum is a partial sum claimed against the guaranteed sum of S$3.41 million under the Jurong West Performance Bond. HDB - owner of the project - has reserved its right to make further claims against its remaining balance.
The group had earlier provided corporate indemnities to issuers of various performance bonds relating to its legacy construction business under CIPL. The Jurong West Performance Bond is one of the performance bonds guaranteed by the group under the legacy corporate indemnities. Should CIPL fail to make payment, COFACE is entitled to seek recovery from the group.
As the guaranteed sum is fully covered by a provision for claims of S$3.46 million recognised by the group as of Dec 31, 2014, the group said it does not expect that this payment will have a material impact on the financial results for the current year ending Dec 31, 2015.