You are here

Red ink continues to flow at Serrano as company undergoes debt restructuring

INTERIOR design contractor announced its schemes of arrangement, as of Feb 23, 2018, have been approved by the court, paving the way for the beleaguered company to refloat its business.

In addition, the company warned the adjudication process for the schemes by the scheme manager in relation to the group's existing debt obligations is ongoing, which could affect its half-year and full-year 2017 financial results.

The group clocked a loss of S$8.93 million for the 2017 financial year, smaller than the S$111.63 million loss in FY2016 as the group continued to suffer contract terminations and the inability to secure new contracts as a result of its ongoing debt restructuring.

Serrano's revenue for the 12 months ended Dec 31, 2017 fell by 96 per cent, or S$16.6 million, to S$650,600, compared to the year-ago period.

Cost of sales for FY2017 fell by S$97.1 million to S$676,000 compared to the year ago as project activity continued to decline, the group said.

Other expenses for FY2017 decreased by S$17.1 million to S$5.1 million compared to FY2016 due mainly to lower impairment losses on doubtful third-party trade receivables, third party other receivables, available-for-sale financial assets, write-offs in production machinery and intangible assets consisting of goodwill.

Total liabilities rose by 5 per cent to S$122.5 million as at Dec 31, 2017 compared to the year ago, due mainly to the net increase in amounts owed to scheme creditors.

Loss per share subsequently rose to 2.28 Singapore cents, while net asset value per ordinary share climbed to 43.15 Singapore cents from 39.87 Singapore cents from the year ago.

"With the amended schemes being sanctioned by the court on 23 february 2018, the schemes shall take effect in accordance with its terms upon a copy of the orders of court being lodged with ACRA," Serrano said in its earnings statement.

"Accordingly, the company's solicitors are in the midst of extracting the orders and lodging a copy with ACRA to effect both the orders and schemes."

Serrano said it is working to revive its business, and is also finalising discussions to acquire Sinbor Company, a business engaged in the supply of wall and floor finishes "that are synergistic and complementary to the group's current business".

The group said it also plans to expand its product range and develop complementary businesses to leverage the group's interior fit-out track record, and capture the revival in the property market.

Serrano said it is also looking to resume trading in the company's shares, which last traded on June 12, 2017.