By LYNETTE KHOO
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OVERSEA-Chinese Banking Corporation (Hong Kong Branch) has dropped its winding-up application against FibreChem Technologies to give the company some breathing space to work out a restructuring plan.
A restructuring proposal, being crafted by nTan Corporate Advisory, could be ready in the next couple of months, according to a source familiar with the matter. BT understands that this could take the form of a combination of equity and debt.
There was no objection from supporting creditors yesterday when OCBC, represented by Allen & Gledhill, requested withdrawing the winding-up petition at the High Court, and the court granted the request. FibreChem was represented by Drew & Napier.
OCBC, which withdrew its application without prejudice to its rights, was petitioning for liquidation of FibreChem after the China-based fibre-maker defaulted on a US$35 million facility loan agreement. The default was a result of the trading suspension of its shares since Feb 25.
The OCBC branch, one of the syndicated lenders of this facility, demanded a repayment of an outstanding sum of US$5.66 million, as stated in its statutory demand dated April 2. FibreChem owed an outstanding principal sum of US$26.25 million under the loan facility, with accrued interest of US$115,581.78 as at March 12.
Meanwhile, the investigation by nTan of FibreChem's financial position is still on. This prompted the Singapore Exchange (SGX) last month to grant FibreChem a series of extensions to report its 2008 and 2009 financial results as well as to hold its FY2008 annual general meeting.
The company has been given a three-month extension to Nov 30 to report its FY2008 results; another three months to Jan 31, 2010 to hold its FY2008 AGM; a further three months to Feb 15, 2010 to report its Q1 2009 financial results; and a six-month extension to Feb 15, 2010, to announce its Q2 2009 results.
Once a market darling, beleaguered FibreChem almost joined the queue of Singapore-listed Chinese companies or S-chips that face winding up. FerroChina's subsidiaries in China are in the process of liquidation while Beauty China has recently been ordered by the High Court in Hong Kong to wind up.
But FerroChina, which has up to Oct 10 to submit an acceptable proposal to SGX to resume trading of its shares, has not been able to gain access to the financial information of its Chinese subsidiaries, which are under PRC court bankruptcy administration.
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