The company announced that it had received a letter of rejection from SGX-ST on Sept 11.

Singapore Exchange Securities Trading (SGX-ST) has rejected New Silkroutes Group Bmt’s proposal for it to resume trading. 

In a Sept 12 bourse filing, the company said it received a letter of rejection from SGX-ST on Sept 11. New Silkroutes Group had submitted its resumption proposal on June 10. 

SGX-ST stated several reasons for rejecting the proposal, which include a disclaimer opinion released on Aug 20 by the group’s external auditors, Baker Tilly TFW, on the group’s financial statements for the financial year ended June 30, 2023.

SGX-ST also notes that the group will remain in a net current liability position as at Dec 31, 2023,  based on the group’s pro-forma financial statements within the same period which took into account the acquisition of Hequ Yuanyang Industrial Co., Ltd (HYI). 

SGX-ST notes that the group’s 12-month cash flow forecast projects that the group would generate $3.3 million from May to April 2025.

However, SGX-ST also notes that the group had failed to submit an independent review report by its auditors on the group's pro-forma financial statements, cash flow projections and financial projections of HYI. 

Based on HYI’s unaudited financial statement for the financial year ended Dec 31, 2023, SGX-ST notes that HYI only turned profitable in FY2023 due to annual renewable contracts with two customers. HYI’s continued profitability, as projected, is dependent on the completion of upgrade works over the next three years. 

Moving forward, SGX-ST says the group also “has not adequately demonstrated” how it will be able to fund the upgrade works amounting to approximately $15.4 million to $19.2 million, given that only $2.67 million remained unutilised under the debtor-in-possession (DIP) facility. 

Finally, SGX-ST also noted that the company had submitted its resumption proposal after the stipulated deadline. 

In response, SGX-ST has requested that the group resubmit a revised trading resumption proposal by Dec 31. 

According to SGX-ST, the revised proposal should include audited financial statements for the financial year ended June 30 and all outstanding unaudited financial statements.

The group must also convene its annual general meeting (AGM) for the financial year ended June 30 by Dec 31. 

The revised proposal must also convince SGX-ST that the group has obtained all the requisite approvals from the various national agencies for the upgrades planned for HYI, and that it has secured sufficient financing to fund the upgrades. 

​​In the event of a failure to meet any of the above milestones by Dec 31, the SGX-ST will proceed to delist New Silkroutes Group. 

Shares in New Silkroutes Group last traded at 7.5 cents in November 2021, when it was suspended.