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Property News

Ho Hup’s property development unit applies for judicial management

KUALA LUMPUR (May 17): Ho Hup Construction Company Bhd (KL:HOHUP) said its 52%-owned unit Golden Wave Sdn Bhd (GWSB) has applied with the High Court to be placed under judicial management.
Judicial management is a corporate rescue mechanism where companies seek the appointment of a judicial manager when they are unable to pay their debts, creditors or directors.
In a filing with Bursa Malaysia on Friday, Ho Hup said GWSB’s judicial management application is part of GWSB’s efforts to rehabilitate the company in a bid to regularise its financial condition and maximise returns to creditors as opposed to being wound up.
The application is also to provide GWSB the opportunity to complete its projects.
It will also seek the involvement of an independent professional to facilitate restructuring of GWSB with the assistance of its management.
“There has been a series of events that has affected the cash flow of GWSB due to the Covid-19 pandemic environment, which has significantly slowed down the timing of payments by customers as well as the progress of the projects undertaken by GWSB,” Ho Hup said.
GWSB is 70%-owned by Ho Hup’s property development division Ho Hup Ventures (KK) Sdn Bhd, which is in turn 75%-owned by Ho Hup.
As at end-2023, Ho Hup Ventures’ total liabilities of RM447.49 million exceeded its total assets of RM449.54 million.
The unit contributed close to 40% of Ho Hup’s revenue for the financial year ended Dec 31, 2023 (FY2023).
Ho Hup stated that the application is not expected to have a significant financial or operational impact on the group, and will provide further updates if there is any material development on the matter.
Last week, Ho Hup announced that its RM1 billion mixed development project in Bukit Jalil will be suspended as it plans to sell the 3.09-acre land the project is sited on for RM110 million, cash, to Exsim Group as it seeks to improve its financial position.
Ho Hup have incurred losses for the last three consecutive years. For the financial year ended Dec 31, 2023 (FY2023), the company’s net loss widened to RM75.07 million from RM32.13 million a year earlier, due to impairments of long-standing receivables totalling RM14.7 million, as well as ascertained liquidated damages expenses of RM15.9 million.
The group also experienced lower contribution recognition for projects such as Laman Iskandaria, Kulai, and The Crown, Kota Kinabalu.
Shares of Ho Hup closed unchanged at 14 sen on Friday, giving it a market capitalisation of RM75.15 million. Year to date, the counter has dropped more than  40%.
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Source: EdgeProp.my


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