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Midas flags two letters of demand

MIDAS Holdings has received two letters of demand in March and April this year respectively, the company said in a filing to the Singapore Exchange on Tuesday.

The first letter, dated March 9, refers to a finance lease agreement entered into by Midas, lessee Luoyang Midas Aluminium Co, lessor Fenghui Leasing Co, Jilin Midas Aluminium Industries Co, Jilin Midas Light Alloy Co (JMLA), former chairman Chen Wei Ping, Beijing Wei Bao Shi Jie Investment Consultant Co on July 22, 2016.

"The board noted that JMLA had provided the above guarantee without informing the group," Midas said. "The former chairman of the company, Mr Chen, had also extended a guarantee in his personal capacity without informing the group when he was still the chairman."

The lessee has failed to repay overdue rental charges and owes the lessor outstanding rental, accrued interest and all other sums amounting to approximately 87.3 million yuan (S$18.3 million), the filing said.

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Meanwhile, the second letter of demand, dated April 16, refers to a financing agency agreement entered into by Dalian Huicheng Aluminium Co, CRRC (Hong Kong) Co, and Midas on April 1, 2017.

CRRC acts as Dalian Huicheng's agent to sell aluminium alloy plate to Newport Metals, Inc and the company is liable for any delayed payment from Newport with liquidated damages incurred. Newport has failed to repay for 13 overdue sales transactions. Therefore, CRRC requested Midas to pay approximately US$6.9 million within seven days from April 16, 2018.

Midas said: "The board will issue further announcements as appropriate, as and when there are any material developments in the matter."