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UOB withdraws JM application, statutory demands against Hoe Leong

HEAVY equipment supplier Hoe Leong Corporation on Friday said that the Singapore High Court has granted leave for United Overseas Bank (UOB) to withdraw its application to place the firm under judicial management. 

Accordingly, UOB has filed a notice to do so, and has also withdrawn all statutory demands against the mainboard-listed company. 

Last month, Hoe Leong Corp announced that it is proposing to sell two of its vessels for US$850,000 each, or a total of US$1.7 million to Allianz Offshore Ship Management.

The sale is expected to generate net proceeds of about S$2.3 million, while resulting in a net loss on disposal of about S$3.15 million. 

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Hoe Leong Corp is now under financial pressure, having received a statutory demand for S$5.7 million from UOB in late August. The sale of the vessels is part of the restructuring plan the company is discussing with UOB. 

In May last year, it was reported that Hoe Leong Corp would become an associated company of UOB, after the bank acquired a 28.66 per cent stake in Hoe Leong via a scheme of arrangement.

Some 1.61 billion shares in Hoe Leong were alloted to the bank at a price of 1.15 Singapore cents per share, totalling about S$18.5 million.

The company had proposed the scheme of arrangement to restructure debt owed to bank creditors, and its controlling shareholder, Hoe Leong Co.

Shares in Hoe Leong Corp have been suspended, and last traded at 0.2 Singapore cent on Aug 28, down 33.3 per cent, or 0.1 cent.