Lemarc Agromond Pte Ltd

Lemarc Agromond Pte Ltd, a Singapore agricultural commodity trader within a group of companies whose Hong Kong parent had been wound up on 12 December 2022, ran into funding difficulties. Its creditor Olam International Limited served a statutory demand for US$4,083,718.32, which was not met, and in September 2022 applied to wind the company up in HC/CWU 189/2022. The company appointed Mr Chow Wai San, an insolvency practitioner, as director to lead a restructuring.

In Originating Application No 29 of 2023 the company sought a moratorium under s 64(1) of the Insolvency, Restructuring and Dissolution Act 2018 (IRDA), saying it intended to propose a scheme of arrangement funded by profits from a new shipping business that the group's founders were negotiating. That business rested on two memoranda of understanding: the Horizon MOU and a proposed Varamar MOU, which Horizon, the company's only secured and largest creditor, had not signed. The court granted a moratorium on 10 February 2023 for four months, despite doubts about the plan, and on the company's first extension application (SUM 1728) extended it only to 31 July 2023, warning that a further extension would not be viewed favourably without significant progress and a realistic timeline for a scheme meeting application under s 210(1) of the Companies Act 1967. On 8 August 2023, after the moratorium had expired, the company filed Summons No 2439 of 2023 seeking a further extension to 15 September 2023.

1. Whether the late application should be allowed despite being filed after the moratorium had expired.
2. Whether the company had shown enough progress in its restructuring to justify a second extension of the moratorium under s 64(1) of the IRDA.

The judge applied the balancing exercise described in Re IM Skaugen SE and other matters [2019] 3 SLR 979 between giving the company breathing space and protecting creditors, noting that an extension application should also explain what had been done, how much more time was needed and what could be achieved in it.

The summons was out of time under s 64(7) of the IRDA. Mr Chow's explanation, that he was still obtaining updates from the founders, did not show why it could not have been filed before the deadline. That question was moot, however, because no extension would be granted on the merits. There was still no date for a s 210(1) application. The Horizon MOU contracts remained unsigned because of regulatory and commercial difficulties known since April 2023, with no alternative offered. Horizon had still not signed the Varamar MOU and had stopped supporting the moratorium. Only one vessel had been identified for the Varamar venture, its financing was not agreed, no profit projections were given, and it was still unexplained how any profits would reach the company. Mr Chow appeared only marginally involved and relied on the founders' updates. The draft financial statements remained of limited value. The requested date appeared arbitrary, and the proposed new business appeared dead in the water.

Hri Kumar Nair J dismissed SUM 2439 and refused to extend the moratorium, describing the application as futile and as merely delaying the inevitable.