THINGS are getting uglier for Beauty China, with the group now facing a winding-up petition by its creditors at the High Court in Hong Kong.
A winding-up petition filed on June 18 alleged that Beauty China was indebted to and had failed to pay the petitioners a sum of HK$133.36 million (S$25 million) as at June 1.
The petitioners are Industrial and Commercial Bank of China (Asia), Banco Weng Hang SA, CIMB Bank Berhad Hong Kong Branch, MCL Global Portfolios SPC Ltd - MCL Focus Opportunities Segregated Portfolio Fund and Public Bank (Hong Kong) Ltd.
Beauty China said it became aware of the filing only yesterday. The petition is to be heard on Aug 26.
A statutory demand from these syndicated lenders was first issued in March, demanding repayment by March 27.
This was followed by a 'standstill' till April 27 to allow negotiations between Beauty China and potential investors, due diligence or conclusion of any transaction to proceed.
This loan default has cast uncertainty over Beauty China's ability to continue as a going concern.
Last Friday, its joint auditors Grant Thornton and HLB Hodgson Impey Cheng steered clear of expressing an opinion on its financial statements for the year ended Dec 31, 2008, given the risks to its going-concern status.
The beleaguered firm is also grappling with difficulties in collecting trade receivables, and the auditors are unable to verify the recoverability of outstanding trade receivables of HK$85.04 million.
After factoring in more impairments and provisions, Beauty China ended up with a net loss of HK$328.16 million for FY2008, instead of a net profit of HK$115.04 million earlier stated in its unaudited statements.
A winding-up petition filed on June 18 alleged that Beauty China was indebted to and had failed to pay the petitioners a sum of HK$133.36 million (S$25 million) as at June 1.
The petitioners are Industrial and Commercial Bank of China (Asia), Banco Weng Hang SA, CIMB Bank Berhad Hong Kong Branch, MCL Global Portfolios SPC Ltd - MCL Focus Opportunities Segregated Portfolio Fund and Public Bank (Hong Kong) Ltd.
Beauty China said it became aware of the filing only yesterday. The petition is to be heard on Aug 26.
A statutory demand from these syndicated lenders was first issued in March, demanding repayment by March 27.
This was followed by a 'standstill' till April 27 to allow negotiations between Beauty China and potential investors, due diligence or conclusion of any transaction to proceed.
This loan default has cast uncertainty over Beauty China's ability to continue as a going concern.
Last Friday, its joint auditors Grant Thornton and HLB Hodgson Impey Cheng steered clear of expressing an opinion on its financial statements for the year ended Dec 31, 2008, given the risks to its going-concern status.
The beleaguered firm is also grappling with difficulties in collecting trade receivables, and the auditors are unable to verify the recoverability of outstanding trade receivables of HK$85.04 million.
After factoring in more impairments and provisions, Beauty China ended up with a net loss of HK$328.16 million for FY2008, instead of a net profit of HK$115.04 million earlier stated in its unaudited statements.
