Aspen subsidiaries face claims amounting to over RM100m
TWO of Aspen Holdings' 1F3 subsidiaries have been served notices of claims for over RM100.4 million (S$32.5 million) in total.
In a regulatory filing on Thursday (Mar 3), mainboard-listed Aspen announced that Aspen Glove had received a Mar 1 letter of demand from Tialoc Malaysia claiming RM93.2 million for construction works done for the glove-making subsidiary's manufacturing facilities, among other services.
Tialoc demanded that payment be made within 7 days from the date of the letter before taking legal action against the company and claiming all legal costs incurred against Aspen Glove.
Aspen said it was seeking legal advice on the merits of the claim while also assessing counterclaims against Tialoc.
In another update after trading hours on Mar 4, Aspen sought to clarify that Tialoc's claim was allegedly for the full contract sum based on interim payment certificates issued for work done. The company claims that there are still material unresolved issues with the contractual works done resulting in losses for Aspen due to loss of production and drop in efficiency of production capacity.
Currently both Aspen and Tialoc are in negotiations without prejudice basis for the ratification of defective works, production losses and insurance claims. Aspen will only pay out the outstanding payment if any, to Tialoc once all issues are resolved.
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A countersuit might be filed against Tialoc and Aspen is assessing the quantum of a possible claim. The company assures shareholders that it would be able to mitigate any immediate going concern risk with the current capital on the balance sheet, credit facilities and planned additional capital injections from shareholders.
Prior to this, Aspen on Mar 2 disclosed that its subsidiary Aspen Vision City (AVC) had received a Feb 24 writ of summons with a statement of claim.
This was filed by a group of purchasers of AVC's properties, who are claiming RM7.3 million for the alleged late delivery of vacant possession of development properties.
Aspen said it had sought formal legal advice on the suit and concluded that it had strong legal defence against it, based on initial advice received. As such, AVC intends to "vigorously defend" against the suit filed by the purchasers.
Aspen is not expecting the suit to have any material financial impacts on the group, pending the outcome of the legal proceedings.
Shares of Aspen ended Thursday up S$0.004 or 5.7 per cent at S$0.074, before the latest announcement was made.
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