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Koon Holdings seeks court protection amid debt restructuring
MAINBOARD-LISTED Koon Holdings and its subsidiary Koon Construction & Transport (KCT) have applied for a 90-day debt moratorium as they intend to propose and implement a scheme of arrangement with their creditors.
On Tuesday, the two companies filed the applications with the High Court of Singapore to obtain an order, among other things, that no legal action or proceedings against them be commenced or continued.
The scheme is necessary to address the debt obligations owed by Koon Holdings and KCT to their creditors and is part of the group’s restructuring exercise to restore the two companies’ financial position, Koon Holdings said in a filing on Wednesday morning.
Details of the scheme are targeted to be finalised during the 90 days.
Koon Holdings and KCT have appointed Tan Kok Quan Partnership as their legal adviser and RSM Corporate Advisory as their financial consultant to advise on strategies for restructuring the debts and liabilities so that the group may continue as a going concern.
Koon Holdings is a Singapore infrastructure and civil engineering service provider specialising in reclamation and shore protection works. KCT is the group's main operating company.
In September, Koon Holdings auditor Ernst and Young issued a disclaimer of conclusion over the group’s interim financial results for the six months ended June 30. The review flagged that the group recognised a net loss of S$50 million for the period, and that its current liabilities exceeded its current assets by S$20.6 million – conditions that indicate the existence of material uncertainty.
Coupled with challenging conditions affecting the construction and precast sectors in Singapore, the material uncertainty may "cast significant doubt" on Koon Holdings' ability to continue as a going concern, Ernst and Young said.
Shares of Koon Holdings have been suspended since Aug 30.