New Toyo International Holdings
New Toyo International Holdings announced yesterday that its subsidiary, Sen Yang Enterprise Co (Senyang), will cease production of tissue paper by Sept 15 on the back of recurring losses.
Senyang, however, will continue with the trading of tissue paper products. The decision followed a group strategic review amid global trade tensions, as the board does not expect Senyang's performance to improve significantly in the near future.
The group had faced several adverse factors, including fluctuating pulp prices against intense domestic competition of tissue paper caused by the US-imposed tariff on Chinese tissue exporters to the United States. In addition, it took longer than the expected time to obtain full production capacity, as well as the time to secure the Forestry Stewardship Certification needed for export sales.
The net loss attributable to the tissue paper business for the financial year ended Dec 31, 2018 was $1.85 million. Based on the company's preliminary assessment, the tissue paper business is expected to report a net loss of approximately $11.4 million for the full financial year ending Dec 31, 2019.
Hoe Leong Corporation
Hoe Leong Corporation yesterday said it has received a statutory demand under the Companies Act from the law firm acting on behalf of United Overseas Bank (UOB), which is seeking payment of about $5.7 million from the company within 21 days from Aug 29, the date of receipt of the statutory demand.
The payment is related to a bank loan owed by Hoe Leong's wholly owned subsidiary, Arkstar Voyager. Hoe Leong, a heavy equipment supplier, is the guarantor for the loan.
Hoe Leong said in July that the letter of demand from UOB claiming repayment will not affect the group's ability to carry on its business. However, it said yesterday: "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 said the group's viability depends on the continuing support of its financial and trade creditors; the group's ability to generate adequate cash flows and to repay its debt obligations when they fall due in the next 12 months, barring adverse changes in the economic and operating environment.
It said: "Meanwhile, the board recommends the trading of the shares of the company be suspended with immediate effect pending the resolution of the situation."
