YONGNAM Engineering & Construction, a wholly-owned unit of steel fabricator Yongnam Holdings, has received a letter of demand from the attorney of Malayan Banking Berhad.

The letter of demand is for a total of RM15.9 million (S$4.6 million) in relation to outstanding payments due under three loan facilities. 

In a filing to the Singapore bourse on Thursday (Sep 7), suspended stock Yongnam’s judicial managers said the letter of demand was dated Aug 24, and was received by the company’s unit on Sep 5. 

The letter stated that Yongnam Engineering & Construction had failed, refused or neglected to comply with the demand as stated in an earlier notice of demand dated Jun 26. 

It also said that Yongnam, as the corporate guarantor, has been placed in judicial management by the Singapore High Court. As a result, the unit in question had committed events of default, and the loan facilities are cancelled and terminated with immediate effect, the letter said. 

All principal and advances being outstanding and unpaid with interest, as well as all other amounts payable to Malayan Banking Berhad shall become “immediately due and payable”, the letter added. 

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As at end-July, Yongnam Engineering & Construction is indebted to Malayan Banking Berhad to the tune of RM15.9 million.

The letter of demand is calling for the repayment of the outstanding sum within 15 days from Sep 5, failing which Malayan Banking Berhad shall take all actions it deems fit, including but not limited to commencing legal proceedings or enforcement proceedings against Yongnam Engineering & Construction. 

Yongnam said its judicial managers have instructed their legal counsel to review the claims, and will make further announcements on the Singapore Exchange if and when there are material developments which warrant disclosure.