Shares in mainboard-listed Xpress Holdings plunged nearly 10 per cent yesterday after the company announced it was embroiled in legal proceedings with creditors.
Xpress shares shed 0.2 cent to 1.9 cents after the printing company told the Singapore Exchange (SGX) that it and its unit, Xpress Print, are fighting creditors over a total of S$4 million in alleged unpaid debt, and facing two winding-up applications.
In one case, several creditors have sued Xpress and its unit over S$2.4 million owed, while in another case, a bank has filed a winding-up application against Xpress Print over S$1.2 million in alleged loans owed.
Xpress said it is in discussion with the bank to restructure repayment terms.
When contacted, the company declined to provide further details on the legal proceedings. Business will continue as usual, it said.
One other creditor has filed a winding-up application against Xpress over S$400,000 in alleged unpaid rental arrears. The company said in the SGX statement that there are "good arguments" that the creditor has "no standing to bring such an application".
Xpress, represented by lawyer Steven Lim, also applied for an injunction to fend off the creditor's winding up application.
A hearing is scheduled next Tuesday to determine if the court will approve Xpress' application, Mr K. K. Fong, founder and chief executive, told The Straits Times yesterday.
The company said it has appointed Stone Forest Corporate Advisory as financial consultant to help broker a settlement with the creditors.
Meanwhile, Xpress has entered into subscription agreements on Tuesday to place a total of 480 million new shares to raise funds to augment its cashflow and working capital.
It said two subscribers, Strong Core Global and Ma Jing, have agreed to subscribe for 240 million new shares each in the capital of the company at an issue price of 2.1 cents per placement share.
The placement, after deducting estimated expenses of about S$600,000, will raise net proceeds of S$9.48 million.
About 55 per cent of proceeds will be used to repay the company's creditors and the rest for general working capital purposes.
Xpress said it will pay an arrangement fee of S$504,000 to Teranova Group, which introduced the subscribers to the company.
The placement shares represent about 19.6 per cent of the existing issued and paid-up share capital of the company as of Tuesday, and represent about 16.39 per cent of the enlarged share capital after the placement is completed.
This article was first published on July 24, 2014.
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