UOB Legally Demands $4 Million Debt Payment From Equipment Supplier
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Singapore-listed heavy equipment supplier, Hoe Leong, said it received a statuary demand from a law firm acting on behalf of UOB, seeking payment of about 5.7 million Singapore dollars.
The statutory demand, issued by law firm Allen & Gledhill on behalf of UOB, seeks payment within 21 days from the date of receipt. The payment relates to a loan borrowed by logistics firm Arkstar Voyager, a wholly-owned subsidiary of Hoe Leong which is also its guarantor.
Whilst Hoe Leong had said in July that a letter of demand from UOB would not affect the group’s business, it said this week that «with the statutory demand from UOB, the company is unable to reasonably assess its financial position»
The company is presently seeking legal advice and is engaging with UOB to remedy the situation, it added.
Hoe Leong’s board made a voluntary request to suspend the trading of its shares «with immediate effect, pending resolution of the situation.
It assured investors that it currently has sufficient funds in its UOB account to settle outstanding payments up to August 31, 2019. It added that the group’s viability was dependent on continued support from creditors and adequate cash flow generation to repay debt obligations due in the next 12 months, barring any material external headwinds.
Questions & Answers
Q.What is the total amount UOB is demanding from Hoe Leong?
What is the total amount UOB is demanding from Hoe Leong?
UOB is demanding a payment of approximately 5.7 million Singapore dollars from Hoe Leong. This amount is being sought through a statutory demand issued by a law firm acting on behalf of UOB.
Q.Which specific entity within Hoe Leong is responsible for the original debt?
Which specific entity within Hoe Leong is responsible for the original debt?
The debt originated from a loan borrowed by Arkstar Voyager, a logistics firm. Arkstar Voyager is a wholly-owned subsidiary of Hoe Leong, which also acted as its guarantor for the loan.
Q.How does Hoe Leong's current statement differ from its earlier assessment of the UOB demand?
How does Hoe Leong's current statement differ from its earlier assessment of the UOB demand?
Hoe Leong previously stated in July that a UOB demand letter would not affect its business. However, it now states that with this statutory demand, the company cannot reasonably assess its financial position.
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