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Hiap Seng calls for trading suspension amid going concern uncertainty
HIAP Seng Engineering on Thursday requested to suspend trading of its shares as it has engaged a financial consultant to review the group's financials and viability.
The board said that it is unable to conclude if the group can operate as a going concern at this stage.
The company said in its Q2 2020 results announcement that it would undergo a restructuring and realignment exercise that would include the disposal of some assets. These assets could include freehold land and buildings in Thailand, and leasehold properties in Singapore.
The exercise is expected to free up cash, to be used as working capital for existing projects, as well as for repayment to existing creditors, said Hiap Seng.
Hiap Seng had narrowed its losses to S$8.5 million from S$22.3 million for the second quarter ended Sept 30, on the back of higher revenue and lower operating costs.
As at Sept 30, the group’s current liabilities exceeded current assets by S$30.1 million. Current liabilities included borrowings from banks of S$32.2 million, trade and other payables of S$34.2 million, and contract liabilities of S$9.9 million, which are invoiced to customers but have yet to be recognised as revenue.
Hiap Seng is a service provider of mechanical engineering, plant fabrication and installation, and plant maintenance to the oil and gas, petrochemical and pharmaceutical industries.
Its shares last traded at S$0.02 on Tuesday.