Novo unit faced with winding-up application

STEEL trader Novo Group said an application has been filed by China Citic Bank International to wind up Novo's 95 per cent-owned indirect subsidiary Novowell ETP and to "repay and settle all outstanding liabilities under the banking facilities in accordance with applicable laws".

The company said that it is in the course of seeking legal advice.

In September, the bank issued a letter of demand to Novowell ETP to repay US$14.3 million, threatening legal action.

Novo said then that the bank facilities were no longer secured by any corporate guarantee from the company, and any potential default in payment by Novowell ETP will not have a direct material impact on Novo's cash flow or operations.

Novo last traded at S$0.56.