Koon Holdings seeks court protection to facilitate its debt restructuring
Fiona Lam
Singapore
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.
The two companies filed the applications with the High Court of Singapore on Tuesday to obtain an order 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 statement on Wednesday.
Details of the scheme are targeted to be finalised during the 90 days.
Koon Holdings and KCT appointed Tan Kok Quan Partnership as legal adviser and RSM Corporate Advisory as 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 an 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 financial results for the six months ended June 30. The group had sunk into a net loss of S$50.2 million, from a net profit of S$232,000 a year ago. The review also flagged that current liabilities exceeded current assets by S$20.6 million.
These conditions indicated a material uncertainty which, coupled with challenging conditions affecting the construction and precast sectors in Singapore, may cast "significant doubt" on Koon Holdings' ability to continue as a going concern, Ernst and Young noted.
Koon Holdings in September said it had begun a "major restructuring and realignment exercise", and was talking to creditors to put in place repayment plans for its liabilities.
The firm also said it was looking at options such as a potential sale of the property and electric power generation divisions, and had cut costs by reducing headcount and streamlining operating processes.
Shares of Koon Holdings have been suspended since Aug 30. It requested the voluntary suspension as it was assessing the ability of KCT to continue on a going concern basis.
