Debao Property Development said Monday the payment of its final dividend for the 2017 financial year was delayed to end-December from end-September as it was unexpectedly required to pay its subcontractors early.
“It has become prevalent in the construction industry in China that subcontractors are not paid in a timely manner despite agreed payment schedules. In response, the company’s subcontractors had demanded that the payment deadlines be brought forward, otherwise, these subcontractors will not proceed with the construction works of the company’s Bay One development project,” Debao Property said in a filing to SGX in response to queries from the exchange.
“In order to complete the Bay One project as per schedule and to avoid any liability in relation to not meeting the relevant completion deadlines, the company acceded to the demands of its subcontractors,” the filing said.
The subcontractors were paid around 20 million yuan by end-September, two months earlier than in the payment schedule, Debao Property said, adding that prevented the company from making the around S$1.5 million dividend payment at that time.
Debao Property said it “inadvertently failed to release an announcement” to inform shareholders of the delay.
The dividend is now expected to be paid by end-December, the filing said, adding the proceeds of the disposal of 19 percent of Profit Consortium Sdn. Bhd. and the sales revenue from the Bay One Project will be used for the dividend payout.
Debao Property said it would set aside the funds needed to ensure the payment, noting its cash and bank balance amounts to around 18.8 million yuan.
The company has said it would pay a final dividend of 2 Singapore cents for the financial year ended end-2017.
Debao Property Development develops large-scale residences, luxury condominiums and commercial properties in China, and is developing The Landmark @ KL City, a 73-floor twin-tower in Kuala Lumpur, Malaysia.