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Huan Hsin's substantial shareholder flags concerns as delisting deadline looms

A SUBSTANTIAL shareholder of Huan Hsin Holdings has flagged concerns over the Chinese electronics contract manufacturer's restructuring, and its financial results.

USP Group, which holds about 16.2 per cent in the company, said it wanted to express its "continued concern with respect to the status of the company's restructuring based on its recent financial announcements".

USP also wanted clarification on whether the company has sought an extension of its delisting deadline.

Huan Hsin was placed in the SGX's watchlist and under the SGX listing rules, the company would be delisted by early March 2016.

It pointed out that Huan Hsin's total comprehensive loss before income tax increased from S$5.5 million to S$20.4 million for the three months ended June 30, 2015, compared to a quarter ago.

"Although the year-on-year figures have improved, but the fact that quarter-on-quarter results have worsened considerably is an indication that the management is not achieving with its restructuring goals to lower costs, streamline operations and dispose off non-performing assets," USP said in a regulatory filing after market close.

It also flagged higher employee benefits, and the repayment of almost S$10 million of short-term and long-term borrowings during the period from June 30, 2015 to September 30, 2015. "We demand to know if any of the loans have been repaid to shareholders or loans that shareholders have provided personal guarantees to."

It asked for the company to set up a meeting among shareholders, and the appointed financial advisor from RHB, "to be given a chance to provide views and input on their recommendation and vote on any course of actions that the company should take from here on".