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Transcorp scraps placement, suspends trading due to lack of capital
THE board of Catalist-listed Transcorp Holdings has recommended that trading in Transcorp shares be suspended with immediate effect until it resolves its liquidity crisis, it said on Tuesday.
An earlier plan to raise S$550,000 through a share placement has also been scrapped, since Transcorp was unable to obtain a loan from the placees and a substantial shareholder to fund the required extraordinary general meeting (EGM) and professional service fees to make the placement happen.
The board said in a bourse filing on Tuesday: "The board has evaluated that the company is no longer able to continue as a going concern. It recommends that trading in the company's securities be suspended with immediate effect until the company resolves the issue of working capital sufficiency and going concern."
Meanwhile, creditor Ace Financial Services is seeking a claim of S$290,188 from Transcorp. The board noted that discussions with Ace were "amicable" but the parties have not been able to reach a common understanding on the matter.
Ace Financial Services is owned by Keith Oh Chee Tat. Mr Oh also owns Motor Megamall, an online car marketplace. Transcorp paid S$1.5 million for a 10 per cent stake in Motor Megamall last year. Kevin John Chia, a non-executive non-independent director of Transcorp, is also a director of Ace.
The board explained: "As a direct result of the claim from Ace and the absence of the short-term funding from stakeholders, the company is not able to execute the required corporate actions, and unable to effect the placement through an EGM. The claim from Ace will also render the placement proceeds as insufficient for the working-capital needs of the company."
Separately, Transcorp clarified the reasons behind its request for a trading halt last Wednesday.
The board said: "This arose after Transcorp subsidiary Regal Motors had on Dec 17 received a notice from the Commercial Affairs Department (CAD) to provide financial information from 2014 to 2018 as well as the corporate email accounts of past employees.
"The provision of the information was to assist CAD to ascertain the facts and circumstances of an ongoing investigation. No statement was provided to CAD. The company has extended and will continue to extend its fullest cooperation to the CAD in its investigations and will make further announcements as and when there are significant developments concerning this matter."