EcoWise cites material uncertainty on going concern

Singapore two-dollar billsSingapore two-dollar bills

EcoWise Holdings has cited Wednesday a material uncertainty over whether the group can continue as a going concern, pointing to recent letters of reminder and demand from financial institutions requesting repayments. 

Earlier this month, the company said it received letters of demand from Malayan Banking (Maybank) and Al Rajhi Banking & Investment Corp. (Malaysia) for overdue payments. In addition, the company has said one of its subsidiaries has received a formal notice from NEA that it breached a clause in its tenancy agreement requiring a security deposit of S$691,200. 

EcoWise said Wednesday in a filing to SGX in response to queries from the exchange that it it in talks with the financial institutions and will explore other measures to manage the current cashflow situation. 

On the NEA tenancy agreement, the agency told the company earlier this week that it grant the request to extend the deadline on the security deposit payment to 28 March, EcoWise said.

“The company is in discussion with an insurance broker to assist in securing an insurance company to provide the security deposit in the form of an insurance performance bond to NEA by the stipulated deadline,” EcoWise said. 

The agreement is to extend the existing lease at a lot at the Sarimbun Recycling Park in Singapore for an additional 17 months, the filing said, noting the group has been operating its recycling facilities for horticultural and wood waste on the property for more than 10 years.

The recycled waste produced on the property provides the raw materials for the group’s renewable energy business in Singapore, EcoWise said. If NEA re-enters the property, the group would need to procure alternate sources of raw materials, which would increase operational costs or could lead to an inability to fulfill contracts and potential penalties, EcoWise said.

Seeking an EGM

Separately, a group of eight shareholders holding around 11.3 percent of the company collectively have filed to convene an extraordinary general meeting (EGM), according to a filing to SGX Wednesday

The shareholder group intents to vote on removing Cao Shixuan as executive director and deputy CEO and on installing three new directors, the filing said.

The company noted two previous shareholder attempts to convene EGMs to remove Cao: One, which did not proceed because Cao obtained an interim injunction to prohibit the meeting, and a second which did not proceed because the shareholders voluntarily postponed it. 

While you’re here, we’re hoping you can help us out.

Your monthly contribution will directly fund our journalism.

You can check your existing account here and you can sign in to Shenton Wire here.

You can also contact us to request our rate card for corporate sponsorship, advertising, syndication and sponsored articles.