SINGAPORE (THE BUSINESS TIMES) - The board of directors of Design Studio Group (DSG) has commenced a winding-up application against the company, noting that it is unable to pay its debts and is cash flow insolvent.
In line with the compulsory liquidation of the company, its subsidiaries DSG Projects Singapore and DSG Manufacturing Singapore have also commenced processes necessary to enter into creditors' voluntary liquidation, DSG said in a bourse filing on Wednesday (Oct 27).
DSG, which does kitchen and wardrobe designs for residential and hotel projects, had been in a restructuring exercise since January last year.
It had applied for a new creditor scheme to allow the group to restructure its liabilities in a sustainable manner and continue operating as a going concern, but the scheme was rejected by the High Court in August this year.
Although the company made an appeal against the judgment, it withdrew the appeal this month as its largest shareholder, Depa United Group, wished to discontinue the financial support it had extended to the company for the restructuring exercise, in the light of the High Court judgment and amid uncertainties and the time taken in relation to the appeal.
The board has since reassessed the situation and said it is of the view that the compulsory winding up is in the best interests of its creditors as it ensures an orderly wind down under the control of a court-appointed liquidator, and is also the most time-efficient and cost-effective manner to liquidate the company.
The winding-up application is scheduled to be heard by the High Court on Nov 19 at 10am.
As a result of the winding-up application, the company will also no longer be in a position to submit a proposal for the resumption of trading of its shares, it said.