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Hoe Leong receives statutory demand from UOB for loan payment

Hoe Leong Corporation on Monday said it has received a statutory demand under the Companies Act from the law firm acting on behalf of United Overseas Bank (UOB) which is seeking payment of about S$5.7 million from the company within 21 days from Aug 29, 2019, the date of receipt of the statutory demand.

Allen & Gledhill is representing UOB. The payment is related to the bank loan owed by Hoe Leong’s wholly-owned subsidiary, Arkstar Voyager. Hoe Leong, a heavy equipment supplier, is the guarantor for the loan.

Hoe Leong had said in July that the letter of demand from UOB claiming repayment will not affect the group’s ability to carry on its business as a going concern.

On Monday, however, it said: “With the statutory demand from UOB, the company is unable to reasonably assess its financial position. The company is presently seeking legal advice and is engaging with UOB to remedy the situation.”

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It added that the group’s continued viability depends on the continuing support of its financial and trade creditors; the group’s ability to generate adequate cash flows and to repay its debt obligations when they fall due in the next 12 months, barring any material adverse change in the economic and operating environment.

It said: “Since our earlier announcement dated 5 July 2019, the borrower has recently received and currently has sufficient funds in its bank account with UOB to fully settle its outstanding principal repayments and accrued interest up to Aug 31, 2019. Meanwhile, the board recommends the trading of the shares of the company be suspended with immediate effect pending the resolution of the situation.”

It made a request at 4pm on Monday for a voluntary suspension of trading in its shares “with immediate effect, pending the resolution of the situation”.