Truevera was appointed by the Chief Restructuring Officer of an SGX listed company that owned and operated an interior fitout manufacturing facility Huizhou, P.R.C to undertake an assessment of closure options and costs. 

Challenge

We note this subsidiary operated as the centralised manufacturing centre for the Group and owed substantial intercompany receivables giving rise to onshore VAT issues. The group was unwilling to continue funding the subsidiaries operations. 

Solution

This engagement was undertaken over several phases. The first phase included a comprehensive cost and cashflow assessment including (a) organised wind down (b) continuation of operations and (c) sale to a third party. 

The second phase included changing the Board of Directors and Legal Representatives with Truevera controlled nominees and eventually the third stage was to underwrite/guarantee a sale to a third party alleviating the financial burden of operating the factory. 

Results

Truevera replaced the existing BoD and Legal Representative with Truevera controlled offshore nominees. The insolvent subsidiary was sold to a third party for a nominal amount with the related party receivables waived saving the Group a significant amount of cash allowing the remainder of the Group to continue operations.