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Tuesday, February 2, 2010

Ho Hup board confident of prevailing at meeting

The board of Ho Hup Construction Co Bhd, embroiled in a tussle with some of its substantial holders, say they could prevail at a shareholders' meeting on Thursday as they have made progress to turn around the company.

Financially strained Ho Hup has been struggling, having been served 23 winding-up petitions over a five-year period for failing to pay RM5.1 million. It has debts of RM110 million in addition to late delivery charges of RM23 million.

The board, led by Ho Hup deputy executive chairman Datuk Vincent Lye Ek Seang and group managing director Lim Ching Choy, has restructured loans and resolved problems with creditors and buyers.

According to Lim, Ho Hup expects to settle the payments with the respective parties in installments over the next two to three years.

"If we didn't do all these fast enough, Ho Hup would have been under water. We may not be here today," Lim told Business Times in an interview in Bukit Jalil, Kuala Lumpur, last week.
Ho Hup has built 225 houses in Jalil Sutera that were abandoned since 2006. Some 205 units have been handed over to buyers, Lim said.

It also launched last week 20 semi-detached homes in Jalil Sutera worth RM30 million. Almost all the units have been sold.

"The RM30 million will help us achieve our next target," Lim said, without elaborating.

Ho Hup has secured RM125 million in financing from Sabah Development Bank (SDB) for its RM2 billion integrated Jalil Green City project in Bukit Jalil.

"With the launch of Jalil City, we will be on a better financial footing. We will get the ball rolling for the project through the money secured. Following that, the project will be self-funded and we will be moving ahead with generating income," Lim said.

Ho Hup is also bidding for new building, construction and road infrastructure development projects in Peninsular Malaysia worth more than RM500 million to replenish its order book, Lim said.

"To me, Ho Hup needs to move forward. What we have done in the past nine months are the first steps to return the company to the black," Lim said.

Ho Hup former managing director Datuk Low Tuck Choy had called for the meeting to replace Lim and Lye as well as five other board members with six new directors.

Low claimed that the revamp plan submitted last October by the current board was not in the best interest of the company's minority shareholders.

"Shareholders should vote for a team that is working for them to enhance shareholders' value and manage the company professionally, to create a strong brand and raise market capitalisation.

"The vote for the right management is important for Ho Hup to move forward and get out of the Practice Note 17 (PN17) category," Lim said.

Lim said SDB, UOB, AmInvestment Bank and Maybank have indicated their support for Ho Hup under the current team.

Ho Hup has also been in the red since 2006. In fiscal 2008, its net loss was RM56.2 million. For the nine months to September 30 2009, it posted a net loss of RM23.8 million.

The 50-year-old company was declared a PN17 company in July 2008.

By Business Times


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