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- Ho Hup said the proposed scheme of arrangement will be detailed in an explanatory statement and put to a vote at a court-convened creditors’ meeting, where it must secure approval from at least 75% in value of those voting.
KUALA LUMPUR (Dec 10): Practice Note 17 (PN17) company Ho Hup Construction Co Bhd (KL:HOHUP) applied for a fresh court order on Wednesday as part of efforts to restructure its debt.
In a bourse filing, the construction group said the application submitted at the High Court sought approval “for a compromise or arrangement for the purpose of formulating a scheme of arrangement with its creditors".
Approval was also sought for a restraining order over the company, said Ho Hup.
It noted that until the application is decided by the court or until the lapse of two months, whichever is earlier, no order may be made, and no resolution may be passed, for the winding up of the company.
The pause is aimed at giving the company time to draft and present a restructuring scheme to its creditors.
Ho Hup said the proposed scheme of arrangement will be detailed in an explanatory statement and put to a vote at a court-convened creditors’ meeting, where it must secure approval from at least 75% in value of those voting.
“Upon the approval of the proposed scheme of arrangement by the requisite majority of 75% of the total value of creditors, present and voting at the court-convened creditors’ meeting, the proposed scheme of arrangement shall be deemed enforceable and binding on all scheme creditors of the proposed exercise.
“As such, the terms of the proposed scheme of arrangement are subject to changes arising from any discussions or negotiations between the company and the creditors,” it added.
Ho Hup fell into PN17 status in April after its wholly owned unit Bukit Jalil Development Sdn Bhd defaulted on RM112.69 million in loan facilities. As guarantor, the company received a demand notice from Insas Credit & Leasing Sdn Bhd for repayment of the outstanding amount.
According to Ho Hup's filing, the restraining order is not expected to materially affect the company’s financials or operations. Day-to-day activities will continue as usual, and the order should reduce disruption from potential legal actions while the restructuring is being finalised.
Although the order may allow certain counterparties to review existing contracts, Ho Hup said it does not anticipate any material adverse impact and intends to engage with them to manage any concerns.
Earlier this month, shareholders voted against the re-election of Datin Chan Bee Leng—the last representative of the founding family on the board—and rejected RM500,000 in directors’ fees at the company’s annual general meeting.
Chan is the wife of Datuk Low Tuck Choy, whose family established Ho Hup. He ceased to be a substantial shareholder on Oct 22. Their son, Kheng Lun, was removed from the board in an EGM called by substantial shareholder Omesti Holdings Bhd (KL:OMESTI).
Ho Hup's external auditor UHY Malaysia PLT had in November flagged a material uncertainty over the company’s ability to continue as a going concern, citing its net loss and capital deficiency for the financial year ended June 30, 2025.
The company posted a RM506.11 million net loss, while the group reported RM447.37 million. The auditor also noted that current liabilities exceed current assets by RM315.2 million at the company level and RM174.65 million at the group level, alongside capital deficiency of RM212.96 million (company) and RM174.65 million (group).
As at end-September, Ho Hup had cash and bank balances of RM1.5 million against RM130.6 million short-term borrowings. It had accumulated losses of RM338.1 million.
Shares of Ho Hup closed unchanged at 5.5 sen on Wednesday, valuing the company at RM26.13 million. The counter has fallen over 63% year to date.
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