Sunvic Chemical unit staves off legal action as guarantor to 180m yuan loan

SUNVIC Chemical's wholly owned subsidiary Yixing Yinyan has staved off legal action as guarantor to a 180 million yuan loan (S$35.4 million). It entered into a new supplemental agreement, on June 13, with borrower Jiangsu Donglai Real Estate Development and lender Yixing Futao Credit, the chemical products manufacturer said on Thursday.

The new supplemental agreement states that Jiangsu Donglai is the primary debtor and shall liquidate its assets or take steps to repay the loan and interest payable to Yixing Futao Credit by June 30, 2020, which is the extended repayment date.

In addition, lender Yixing Futao Credit will not start any legal proceedings against Jiangsu Donglai and Yixing Yinyan before the extended repayment date.

Jiangsu Donglai, which is unrelated to Sunvic, had failed to pay back the loan when it was due on Oct 15, 2018.

Lawyers acting on behalf of Yixing Futao Credit had sent a letter of demand on Nov 14, 2018, seeking payment of 183.7 million yuan, which includes the loan amount and subsequent accrued interest.

Mainboard-listed Sunvic's shares have been suspended since Jan 11, after it said on Jan 10 that it had received two letters of demand totalling 222.5 million yuan, one of which was from Yixing Futao Credit.