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Ryobi Kiso suspends trading after unit defaults on loan repayments; hires independent financial adviser
GROUND engineering solutions firm Ryobi Kiso's subsidiary Ryobi Kiso (S) Pte Ltd has defaulted on its repayment obligations to "certain bank lenders" and is in breach of the corresponding banking facilities, the firm announced on Wednesday in an exchange filing.
As a result, Ryobi Kiso has requested a voluntary suspension of its mainboard-listed shares and has appointed PricewaterhouseCoopers (PwC) as an independent financial adviser to assist in the matter.
PwC will help to establish the group's current financial position and projections, and design a restructuring proposal in concert with bank lenders, to enable the group to continue operations and tide over the current situation, Ryobi Kiso said in its filing.
"The occurrence of the matters above may trigger cross default provisions in other banking facilities and project contracts of the group," Ryobi Kiso warned.
"The company, together with PwC and its legal advisers, is assessing the financial impact of the matters above on the banking facilities and project contracts of the group."
In its latest fiscal third-quarter results for the period ended March 31, 2018, the group was hit by a lower value of work undertaken in the period and prolonged work phases of several projects (leading to higher operating costs incurred), which saw it swing to a loss of S$6.5 million attributable to equity holders from a profit of just S$106,000 in the previous year-ago period.
The group's revenue for Q3 was S$28 million, a fall of 29.5 per cent or S$11.7 million from S$39.7 million in the previous corresponding period.
Its current liabilities excluding borrowings stand at S$63.02 million, and it recorded cash and cash equivalents of S$13.51 million, down from S$21.98 million nine months ago.
The group had a S$168.9 million order book as at March 31, 2018, comprising projects from public infrastructure, public housing, residential, commercial and geoservices.
It was "unlikely that there will be an improvement in the group's financial performance in the next reporting period", the group cautioned, with the construction sector set to remain challenging.
"External factors such as keen competition, rising costs and the tight labour market will continue to add pressure on the group's performance."
Ryobi Kiso's counter last traded on June 20, closing at S$0.13 apiece.