SINGAPORE - Mainboard-listed Ley Choon Group Holdings, a one-stop service provider for underground utilities construction and road works, announced on Monday (Sept26) that it has entered into a debt restructuring agreement (DRA) with its lenders.
Lenders who have existing securities over earnings from the group's ongoing projects will release current and future project proceeds into the group's operating bank accounts subject to the terms of the DRA, the company said in a filing with the Singapore Exchange.
The group shall repay the principal and interest owing to lenders according to a cash sweep mechanism and will be required make a bullet repayment, that is a lump sum payment for the entirety of loan amount, to the lenders on March 31, 2021, the final repayment date.
The Group will pay interest on the loan amount to the lenders until this final repayment date.
As part of the DRA, the group shall also dispose its non-core assets and utilise the proceeds to repay the lenders.
Said Mr Toh Choo Huat, Ley Choon executive chairman and CEO: "With the debt restructuring agreement now formally inked, we shall now re-focus on our business operations, to secure more projects and to improve our profitability. Our order book remains healthy and divesting our non-core assets will strengthen the Group's balance sheet.
"These positive developments should underpin our commitment towards improving shareholder returns."
Separately, Ley Choon said on Monday in another filing that it had agreed last Friday to dispose of a wholly owned subsidiary in line with its debt restructuring plan,
The group will sell Ley Choon Development Pte Ltd to mainboard-listed developer Tee Land for about S$11.5 million. The unit's main asset is a 12,930 square foot land parcel at 241 Pasir Panjang Road.
Ley Choon said it expects to receive net proceeds of about S$9.94 million, which will be used to pay off a redemption amount to Sing Investments & Finance.
The balance will then be transferred to Ley Choon. Some S$1.06 million from the transfer will also be used to pay escrow agent Madison Pacific Pte Ltd.
In its most recent financial results, the group reported a net profit of S$600,000 for its first quarter ended June 30, 2016, reversing earlier quarters of losses.
Ley Choon also added that it has recently secured a S$35.3 million PUB water pipeline contract, boosting its order book to S$172 million.