Nam Cheong hit by $10m claim from OCBC

Malaysian offshore vessels builder Nam Cheong has received a writ of summons and statement of claims for a sum of around $10.04m from Overseas-Chinese Bank of Corporation (OCBC).

Pursuant to the writ of summons handed down by the High Court of Labuan in Malaysia, OCBC is claiming against Nam Cheong International Ltd as borrower under a credit facility, and against Nam Cheong as guarantor to the credit facility.

Singapore-listed Nam Cheong said it is “currently reviewing the writ of summons and seeking legal advice on this matter.”

Embattled Nam Cheong has been holding discussions with its principal lenders to address its debt maturities and various obligations owed to financial lenders and trade creditors.

Amid the severe downturn of the offshore sector, the OSV builder has struggled to win sales for its build-to-stock vessels as the lacklustre market has been inundated with too many vessels.

Nam Cheong said it has deferred the schedule of deliveries of its vessels currently under construction, both at customers’ requests and also at the group’s initiatives.

“The group continues to take steps as part of ongoing measures to position itself to ride out the challenging market environment, including a review of cash flow projections, costs cutting measures as well as discussions with various parties regarding possible transactions to contain operating costs,” Nam Cheong stated.

Posted 21 June 2017

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Lee Hong Liang

Asia Correspondent