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Koon Holdings to wind up precast division; sells stake in Australian firm
KOON Holdings on Tuesday said it has decided to wind up its precast division, so as not to jeopardise the group's ongoing restructuring.
The division, which specialises in the precasting of concrete structures, includes Econ Precast Pte Ltd, Econ Precast Sdn Bhd, Contech Precast Pte Ltd, Bukit Intan Pte Ltd, Sindo-Econ Pte Ltd and PT Sindomas Precas.
"Due to aggressive bidding amongst competitors and operating challenges faced, some of these precast division companies have been suffering losses," Koon Holdings said. This in turn contributed to Koon Holdings' poor financial position, it added.
Some of the precast division companies are also facing claims made by creditors, and have had to address legal proceedings commenced against them by creditors. Given the financial position of these companies, Koon Holdings studied the viability of having them defend and/or settle the legal proceedings in the Singapore courts.
However, after further consideration, Koon Holdings decided to commence the voluntary winding-up proceedings for the division.
Koon Holdings is proposing to appoint Lin Yueh Hung and Ng Kian Kiat of RSM Corporate Advisory as joint and several liquidators for the administration of the voluntary winding-up proceedings for Econ Precast Pte Ltd, Bukit Intan Pte Ltd and Sindo-Econ Pte Ltd.
Meanwhile, as Econ Precast Sdn Bhd is a subsidiary of Econ Precast Pte Ltd, the Malaysian firm will be dealt with by the Singapore firm's liquidators. PT Sindomas Precas in Indonesia is a subsidiary of Sindo-Econ Pte Ltd, and thus will be dealt with by the latter's liquidators.
Koon Holdings also highlighted that Contech Precast is the subject of a compulsory winding-up application initiated by the CBE Group in the Singapore courts. Koon Holdings will provide further updates about this matter in due course, if necessary.
In a separate bourse filing on Tuesday, Koon Holdings said it completed the disposal of its 74.06 per cent stake in Australian energy infrastructure company Tesla Holdings Pty Ltd for about A$8.9 million (S$8.6 million). Tesla Holdings owns and operates four diesel power generation plants in Western Australia.
The purchase price comprised A$7.2 million in capital and unfranked dividends of about A$1.7 million.
The disposal was required under the terms of one of the two schemes of arrangement. According to the scheme, Koon Holdings must dispose of its interests in the Australian firm, so that it can use the net proceeds to make a cash distribution to participating creditors with Class A and Class B claims.
Mainboard-listed Koon Holdings is an infrastructure and civil engineering service provider specialising in reclamation and shore protection works. Koon Construction & Transport (KCT) is the group's main operating company.
Koon Holdings and KCT had proposed their respective schemes of arrangement as part of the group's debt restructuring exercise, and the Singapore High Court on June 23 approved both schemes. The schemes subsequently commenced from June 26.
Shares of Koon Holdings have been suspended since Aug 30.