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Sumatec to settle suit with Hoe Leong Corporation for RM27m
HEAVY equipment maker Hoe Leong Corporation announced after trading hours on Thursday that the company and its 80 per cent owned subsidiary, Ebony, have agreed to settle a law suit with Sumatec Resources Berhad and its former managing director Chan Yok Peng.
Sumatec will pay Ebony a sum of RM27 million to be settled in the following manner: Sumatec will pay Ebony RM7 million in cash, and Sumatec will issue Ebony redeemable convertible preference shares in Sumatec in the value equivalent to RM20 million no later than the corporate exercise completion date of Oct 30, 2018.
The parties will bear their own legal costs in respect of the litigation and the settlement agreement.
In the event that Sumatec does not make payment of the settlement sum in accordance to the agreement, Ebony will have the option to enforce the summary judgment order issued by the Singapore High Court.
The settlement agreement is not expected to have a material impact on the group's financial statement until the settlement sum has been fully paid up.