Phnom Penh SEZ reports $1.84M loss as $14M lawsuit still in Singaporean arbitration

Phnom Penh Special Economic Zone (CSX:PPSP) – the leading Special Economic Zone in Cambodia – employing around 21,000 staff has reported a loss of $1.84 million from January to June this year. The loss was attributed to the company not having any land sales for the current quarter.

The Company made $3.53 million in first-half revenue however spent $5.25 million in sales, administration, and finance costs.

No dividend has been paid or declared by the Company since the end of the previous financial year. In response, shareholders had approved a share buyback scheme in October last year however this has yet to be completed due to undisclosed reasons.

The company has taken out $18.7 million worth of loans secured by its investment properties valued at $7.91 million that has been pledged as security to secure the term loans granted.

In November last year, a Notice of Arbitration was lodged at the Singapore International Arbitration Centre by Colben System Pte Ltd, a 51% associate of the Company and Colben Energy Holdings (PPSEZ) Limited (together, the Claimants) against the Company claiming that the Company had breached certain terms of the Joint Venture Agreement entered into by the Company and one of the Claimants.

According to the report, the matter is currently under arbitration proceeding with no subsequent update or progress since the Group’s last annual audited financial statements for the financial year ended 2020. The directors of the Company consider the lawsuit to be a frivolous and baseless claim and that the outcome of this arbitration would be in the Company’s favor.

According to the audit firm Baker Tilly (Cambodia) the directors are of the view that a provision in relation to this claim is not necessary. The potential undiscounted amount of the total payments that the Company would be required to make if there was an adverse outcome for the Company, as claimed by the Claimants is $14.41 million at a minimum.

Official company documents list Oknha Lim Chhiv Ho as the company’s major shareholder (45.09 percent), WD Infologistics PCL (14.61 percent), Zephyr Co Ltd (14.17 percent) and the most recent major shareholder Ng Lian Soon (9.04%) of the 71,875,000 listed shares.

PPSP stock price currently trading at KHR 2,110 a share down from the Company’s 2016 initial public offering of KHR 2,860.

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