China Sky receives court order for auction of subsidiary's land used as collateral

CHINA Sky Chemical Fibre Co Ltd announced on Thursday that it has received a court order from a China court, pertaining to an application made by the Industrial and Commercial Bank of China (ICBC) for the evaluation and auction of land belonging to China Sky's subsidiary, Qingdao Zhongda Chemical Fibre Company Ltd (Zhongda).

The Fujian-based nylon fibre maker said that the court order relates to lawsuits filed against its China subsidiaries for securing loans totalling 1.073 billion yuan (S$219 million), in which Zhongda's land is listed as one of the collaterals.

"In order to preserve and realise the the lawful rights and interests of ICBC, the court has registered the application and is giving the relevant stakeholders of the land 15 days from the date of the court order to submit their claims. After which, the court shall proceed for the land to be evaluated and auctioned off," China Sky's announcement said.

It added that it would keep its shareholders informed of any further developments.