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Monday, August 26, 2013

Ho Hup reaches calm waters after rocky ride (Chronicle)

It has been a roller-coaster ride with high tension at every turn, from battling shareholders, court room drama, to staving off creditors, but for Ho Hup Construction Co Bhd it was well worth the ride.

With its crown jewel and centre of controversy – the 60-acre piece of land in Bukit Jalil – in its posession again, the foundation is set for rebuilding the company brick by brick, literally.

"It has been an adventure. We are proud that we have reached this stage, but there's a long way to go. Now we have to grow the company," its executive director Derek Wong Kit Leong told SunBiz.

After three years of being on 'war' mode, Wong can't be blamed for wanting the whole episode behind him and forgotten.

"When we took over the management of this company, we firstly did not want the old brand name to go down. Our vision as well as the shareholders was to grow this company into a substantial development," he said.

"We want to be known as a property, infrastructure and construction company. We have built the Twin Towers and the North South Expressway and we want to continue to be involved in that business," he added.

Ho Hup's total borrowings stood at RM10.71 million as at Dec 31, 2012 while its net total payables were RM158.76 million. The group also has minimal cash, about RM4 million.

The company however is banking on its ongoing regularisation plan to wipeoff its debt once and for all.

"Post restructuring, Ho Hup will be almost debt free. Our creditors would be paid in shares and cash. Once the exercise is completed, Ho Hup will be cash rich and on the next stage of expansion," Wong said.

Ho Hup's regularisation plan involves a rights issue of 102 million irredeemable convertible preference shares (ICPS)attached with up to 51 million free warrants at 50 sen per ICPS, and the issue of 136.63 million redeemable convertible preference shares (RCPS) valued at 50 sen each to creditors for debt settlement.

On top of this, the agreement with Malton to co-develop the land in Bukit Jalil would put Ho Hup in a good stead financially.

Wong also assured that the recent appeal by Zen Courts Sdn Bhd in relation to Ho Hup's buyout of its 30% stake in Bukit Jalil Development Sdn Bhd (BJD) would not derail the company's regularisation plan.

The appeal relates to the High Court's dismissal of Zen Courts' application to make further representations on the valuation report issued by Ferrier Hodgson MH Sdn Bhd as independent valuer on Dec 31, 2012, as well as the High Court's decision to fix the purchase price of Zen Courts' shares in BJD at RM37.97 million.

To Wong, things are already looking bright for Ho Hup. Based on the group's year-to-date earnings, he sees Ho Hup turning profitable this year after five years of losses.

"If you have seen how we have moved in the last three years we have been fairly ambitious and aggressive company. Hopefully, with a healthy position we can scout for good opportunities. We are starting off now from a fairly strong base to move forward," he said.

Wong also hinted that shareholders could be rewarded with dividends in the near future.

"We don't see why not. Maybe 2015 onwards when the company is very, very healthy and in a strong position," he explained when asked about a possible dividend payout.

In conclusion, Wong said, "We feel very proud. There is a sense of achievement after taking over an ailing company and managing to overcome it. Of course we had help from a lot of people. We are proud that we have reached this stage but there is long way to go now to grow the company."


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