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Ryobi Kiso applies to High Court to begin reorganisation process
GROUND engineering solutions firmRyobi Kiso on Tuesday said that it has made applications to the High Court to commence a court-supervised reorganisation process, with the intention of proposing a scheme of arrangement to reorganise its liabilities.
It is seeking a moratorium against enforcement actions and legal proceedings by creditors. The company has engaged WongPartnership as legal advisers and PricewaterhouseCoopers as financial advisers in this process.
The moratorium orders, if granted, will give its subsidiaries and related companies "breathing room" to negotiate with their creditors and to formulate a scheme of arrangement and restructuring plan, it said.
"The Singapore construction sector has seen significant challenges in recent times. Intense competition among fellow industry players has resulted in thin margins for piling and ground engineering projects. These industry-wide issues have added to the applicant companies’ cash flow pressures, which are the result of delays by main contractors in certifying claims, protracted negotiations over variation orders for work done, and the need to make prompt payments to suppliers and subcontractors to ensure that projects continue to run smoothly," it said.
The court orders, if granted, are intended to allow the firm to alleviate the pressure on its subsidiaries’ cash flow, so that they can continue their operations and protect the value of their respective businesses whilereorganising liabilities.
The subsidiaries intend to continue ongoing projects with minimal disruptions while they undertake this court supervised reorganisation process.
Meanwhile, a successful reorganisation process will enable the creditors to achieve a better recovery of their debts than in a liquidation, and preserve the value of the group's businesses "for the benefit of all stakeholders", it said.
A pre-trial conference has been scheduled for August 2, 2018, but this will be administrative in nature, where the Court will give directions on the conduct of the proceedings; it will not be a substantive hearing of the applications, the company clarified.
Trading in the stock has been suspended.