GS Holdings recovers 100m yuan of 132.67m yuan debt, will ask to lift trading halt

GS Holdings has managed to recover 100 million yuan (S$20.4 million) of a substantial debt owed to it by 14 food-and-beverage outlets in China, the Catalist-listed company said on Tuesday.

As at Dec 31, 2019, the outlets had owed 120 million yuan to GS Holding's subsidiary, Wish Hospitality Holdings, for branding, operation and procurement services to the outlets. At the time, GS Holdings said the payment delay was due to ongoing consultations between Wish and China's tax authorities on the amount of tax payable by Wish before the outlets would be allowed to remit the fees to the subsidiary.

GS Holdings managed to recover 20.8 million yuan at the end of 2020.

However, as at Dec 31, 2020, the aggregate amount that remained payable increased to 132.67 million yuan, with the addition of service fees billed up to that date. When the latest payment is transferred and verified, the amount that remains payable will be 32.67 million yuan.

Kaifeng Jufeel Biotechnology is the authorised representative that succeeded in collecting the payment.

Upon being appointed as the representative, Kaifeng Jufeel provided undertakings and securities in favour of Wish and Wish Shanghai, including a mortgage over land and factory buildings valued at 221 million yuan. If Kaifeng Jufeel fails to perform its obligations, Wish Shanghai will be entitled to enforce the mortgage and dispose of the properties to recover the outstanding fees and enforcement costs.

GS Holdings' board believes that sufficient information has been disclosed for shares to continue trading in an orderly manner, and confirmed that it has provided all material disclosures necessary for trading to continue. It will request to lift the trading halt on its shares.

GS Holdings shares last traded at S$0.45 on April 21.