Hubline unit is served with winding-up petition

by **Cals** Mon 05 Oct 2015, 01:34

Hubline unit is served with winding-up petition

By Meena Lakshana / theedgemarkets.com | October 2, 2015 : 8:33 PM MYT

KUALA LUMPUR (Oct 2): [size=16]Hub Shipping Sdn Bhd, a wholly-owned subsidiary of Hubline Bhd, has been served with a winding-up petition by Textainer Equipment Management Ltd over claims amounting to US$3.73 million (RM16.47 million).

In a filing with Bursa Malaysia, the winding-up petition against Hub Shipping was presented at the Shah Alam High Court on Sept 25 by Textainer and a copy was served to the company today.

Hubline alleged that Textainer is claiming an inflated amount, which includes items that Hub Shipping disputes.

The marine shipping company said Hub Shipping has a container leasing contract with Textainer; and while Hub Shipping was under a restraining order related to Section 176(10A) of the Companies Act 1965, Textainer had on July 15, 2015 made a demand under the Companies Act 1965 for the payment of US$3.73 million.

The restraining order was sought by Hub Shipping to prevent potential litigations or proceedings from creditors that may adversely affect the restructuring currently undertaken by the group, which is exiting the container shipping industry.

Hubline said the financial and operational impact of the winding-up petition on the group is not significant, and as the company is exiting the container shipping industry, the company has already fully provided for the impairment of the total cost of investment in the subsidiary at RM102 million.

Therefore, the company is not expected to incur any further losses from the winding-up petition, Hubline said.

Despite this, the company is seeking legal advice to resolve and/or enter into defence.

Case management of the matter has been fixed on Jan 8, 2016.

Hubline Bhd had announced on Feb 18 that it is exiting the container shipping business industry following losses incurred by the division over the last few years and on the back of weak prospects for an immediate turnaround.

The company had said continued participation in the sector would eventually eat into its profitable operations of the break bulk division.

Hubline had said the global liner industry is struggling with the depressed freight rates to meet operating costs since the economic crisis and overcapacity was challenging its operating model.

Hubline (fundamental: 0; valuation: 0.9) shares closed unchanged at 1.5 sen.

(Note: The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
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