Swee Hong to delist by Sept 23 after SGX rejects appeal

Even approving firm's scheme of arrangement would not enable it to meet extension criteria requirements

Construction firm Swee Hong will have to delist by tomorrow after its last ditch appeals to the Singapore Exchange for a stay of execution were rejected.

The watch-listed firm had appealed against the delisting and asked for an extension of six months for it to submit its resumption proposal.

The SGX said on Sunday night that it took into account the fact that Swee Hong's scheme of arrangement approved on Sept 2 would result in the company no longer being in a net liability position on completion of the scheme.

Even approving the scheme would not enable the company to meet any of the extension criteria requirements.

It also noted that the firm had submitted that investor CIIC Group could procure the entry into agreements with large Chinese state-owned enterprises and a public listed firm to participate on construction projects here and across the region.

But the SGX pointed out that Swee Hong had not entered into further definitive deals or been awarded actual projects.

It said these deals were highly speculative with no certainty that the company would be able to secure any actual projects.

The SGX noted that as the firm operates only in Singapore, there was no evidence that securing such projects would enable it to achieve profitability and have a market capitalisation of at least $40 million to meet the requirements for its removal from the watch-list.

Discrepancies were also cited between unaudited and audited accounts, with the restated revenue for 2019 reduced by $36 million to a negative $11.2 million from a previously reported $25.14 million. This was due to an allowance for impairment loss of $32.3 million against revenue.

There was also a significant reduction in gross revenue, from $25.1 million last year to $4.7 million in 2020.

The company generated negative cash flow from operating activities of $5.4 million last year and $4.1 million in 2020.


Swee Hong also reported an increase in its loss before tax for 2019 after the restatement, which widened further to a loss of $57.9 million.

SGX also said that Swee Hong had submitted that if it failed to maintain its listing status, there can be no assurance that the CIIC Group would continue to support it.

Swee Hong's board said the company was not able to make any exit offer to shareholders, given its financial position.

Trading in Swee Hong shares was suspended in May last year.


A version of this article appeared in the print edition of The Straits Times on September 22, 2020, with the headline 'Swee Hong to delist by Sept 23 after SGX rejects appeal'. Print Edition | Subscribe