Innopac owed $2.41m, evaluating options to restructure

Investment holding firm Innopac Holdings is evaluating several restructuring options to improve its financial position, while awaiting a $2.41 million payment that has been outstanding for more than three years.

The company supplied the information yesterday after a number of queries from the Singapore Exchange.

One centred on why Innopac's $2.41 million "trade and other receivables and prepayments" were greater than the $102,000 in revenue recorded for the 12 months ended Dec 31. The firm disclosed that $2.36 million of receivables from subsidiary Dezhou Sheng Rong Gas Co have been due for more than three years.

The SGX also asked why Innopac invested only $6 million of the estimated US$12.5 million (S$16.5 million) required into a facility meant for microalgae cultivation and oil extraction.

The company said it had intended to raise the budgeted US$12.5 million from internal sources when it entered into the joint venture agreement in September 2015. At the time, it had cash and near-cash instruments of $7 million and was going to raise the balance from bank loans and borrowings.

"Despite its best efforts, the company was not successful in raising the full budgeted amount of US$12.5 million, resulting in the decision with the joint venture partner to construct a downsized facility," Innopac said.

It added that both parties then decided to sell it on an "as is where is" basis.

There were also queries about the firm's gold exploration and exploitation undertakings in the Kyrgyz Republic.

Innopac said it was unable to determine the total investment as it was an exploration project, in which it has a 50 per cent stake.

"The joint venture company will require further studies to determine the funding requirement," Innopac said.

It added that it is evaluating "several" restructuring options and is seeking professional and legal advice before presenting plans to the board for approval.

Innopac shares last traded on Feb 13 at 0.3 cent.