China bank demands US$19.5 repayment from Novo Group

It would have to be settled on Sept. 12.

Singapore listed steel trader and tin plate manufacturer Novo Group has received a demand letter from China CITIC Bank International, demanding the group to immediately settle repayment of about $19.3 million.

The letter was addressed to the group's 95%-owned indirect subsidiary, Novowell ETP Ltd.

In a statement, the group said this includes the outstanding principal and the accrued interests in respect to the banking facilities.

The group furthered that the bank is expecting them to settle the payment by September 12 or it may take legal action as it deems necessary to safeguard its interests.

"As disclosed in the Company’s announcement dated 29 June 2016 and the Company’s annual report
2016, the Bank had executed a deed of release of the guarantee dated 8 December 2015 in favour of the
Company. Following the said release, the Bank Facilities are no longer secured by any corporate
guarantee by the Company," the group explained.

More so, the group claimed that any potential deafault in payment by Novowell ETP will not have a direct material impact on Novo's cash flows or operations, as that the two are separate legal entities.

Novo added that Novowell ETP does not have a material contributions to the operations of the group,