Malaysian offshore shipbuilder Nam Cheong, which is currently in discussions with lenders and advisers to restructure its business, has received a writ of summons and statement of claim from Singapore’s Oversea-Chinese Bank Corporation Limited (OCBC) in the High Court of Labuan, Malaysia.
The writ of summons, which claims against subsidiary Nam Cheong International as borrower under a credit facility and Nam Cheong as guarantor, is claiming $10,044,653.59 as at April 30 April together with interest, late payment charges and costs OCBC clams it is due for a breach of the facility agreement.
Nam Cheong says it is currently reviewing the writ of summons and seeking legal advice, while also remaining committed to engaging in restructuring discussions with its principal lenders, including OCBC, and key stakeholders.
Additionally, Nam Cheong says it has taken further measures to ride out the poor market conditions, including a review of cash flow projections and cost cutting measures. It has also deferred deliveries of its vessels currently under construction at third-party yards, both at the request of customers and at its own initiative.
Nam Cheong did warn however that while it believes the company is able to operate as a going concern as a result of these initiatives and discussions, there is no assurance a restructuring deal will be reached.
“In the event the restructuring or initiatives do not achieve a favourable outcome in a timely manner, the company and the group will be faced with a going concern issue,” Nam Cheong said.