Ho Hup slips into PN17 status after unit defaults on RM113m loan facility

• The construction company said it received a demand notice from Insas Credit & Leasing Sdn Bhd over Ho Hup’s role as guarantor for its wholly-owned subsidiary Bukit Jalil Development Sdn Bhd, which failed to repay the outstanding loan amount.

KUALA LUMPUR (April 18): Ho Hup Construction Co Bhd (KL:HOHUP) said on Friday it has been classified as a Practice Note 17 (PN17) issuer after its subsidiary defaulted on outstanding loan facilities of RM112.69 million.

The construction company said it received a demand notice from Insas Credit & Leasing Sdn Bhd over Ho Hup’s role as guarantor for its wholly-owned subsidiary Bukit Jalil Development Sdn Bhd, which failed to repay the outstanding loan amount.

"The demand against the Ho Hup, being the guarantor, triggers Paragraph 8.04 and Paragraph 2.1(f) of Practice Note 17 of the Listing Requirements, whereby the guarantor is unable to provide a solvency declaration to Bursa Securities," Ho Hup said in a bourse filing.

The loss-making company must now announce within three months whether its regularisation plan will significantly change its business direction.

It then has 12 months to submit and secure approval for the plan — either from the Securities Commission if it involves major changes, or from Bursa Securities if it does not.

If Ho Hup fails to meet the regularisation requirements within the stipulated timeframes, Bursa Securities may suspend trading of its shares on the sixth market day after issuing a suspension notice.

The company may also be delisted, though it has the right to appeal within five market days of the delisting notice.

Ho Hup has been loss-making for 13 consecutive quarters. For the fourth quarter ended Dec 31, 2024, its net loss widened to RM113.8 million from RM55.3 million a year earlier, as revenue fell nearly 60% to RM6.35 million from RM15.7 million.

As of end-December 2024, its current borrowings stood at RM320.3 million, with non-current borrowings at RM76.6 million. Total current assets stood at RM801.3 million, while non-current assets came in at RM195.4 million.

Boardroom changes

In a separate filing, Ho Hup announced a slew of boardroom changes, including the appointment of Narayanasamy Chithambaram as an independent and non-executive director.

Narayanasamy, 65, is a legal professional with extensive experience in corporate transactions, including takeover bids, mergers and acquisitions, joint ventures and restructuring.

He also currently sits on the board of Main Market-listed Microlink Solutions Bhd (KL:MICROLN).

Meanwhile, the company announced the resignations of two directors — Datuk Wong Gian Kui, due to other work commitments, and Danny Hoe Kam Thong, due to personal reasons.

Low Kheng Lun, grandson of Ho Hup’s co-founder, the late Low Chee, has also been redesignated as executive director from non-executive director.

Currently, Ho Hup’s largest shareholder is Datuk Low Tuck Choy, the eldest son of the late Low, with a total shareholding of 11.58%.

Shares in Ho Hup closed down half a sen or 3.6% to 13.5 sen on Friday, giving it a market capitalisation of RM70 million.

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