Company Seeks to Secure Funds to Service S$90.7 Million in Borrowings Due Next Year
Yongnam Holdings is in discussions with potential financiers and investors to secure refinancing or investment, as the company faces S$90.7 million in borrowings maturing within the next year, CEO Seow Soon Yong revealed.
Speaking on Wednesday (Nov 23), Seow explained that the company is exploring these options to ensure it has adequate funds to meet its borrowing obligations and maintain operations. He clarified that these negotiations are mutually exclusive, and Yongnam intends to either refinance its borrowings or secure an investor.
The mainboard-listed steel fabricator reported a net loss of S$18.2 million for its third quarter ended September 30, marking a 73 per cent year-on-year increase in losses. Additionally, its borrowings more than doubled, rising to S$90.7 million from S$37.2 million previously. These borrowings are due within the next 12 months.
In response to queries from the Singapore Exchange, Seow attributed the rise in borrowings to term loans of S$61.2 million due in the coming year. He noted that refinancing could help the company manage these debts and remain operational. Alternatively, securing an investor could involve renegotiating terms with lenders and creditors to meet payment obligations.
Yongnam also mentioned in its financial report for the period ending September 30 that it might consider selling its steel beams and columns to bridge any short-term cash flow issues. However, this move could impact the company’s ability to secure new projects involving these assets.
Yongnam’s shares (AXB 0%) closed flat at S$0.026 on Tuesday before requesting a trading halt the following morning. After publishing a letter to shareholders on Wednesday, the company requested a voluntary suspension of its share trading on Thursday to prevent irregular price movements and avoid market confusion during negotiations.
