Our Partner and Co-Head of Restructuring & Insolvency, Keith Han, was recently quoted in The Straits Times article titled, “Contractors may face contractual disputes, claims as Covid-19 legal respite ends”.
Keith spoke on how the end of the temporary relief period will negatively impact contractors.
“As a result, companies that are financially weak could go under, with many small and medium-sized enterprises (SMEs) likely to face financial distress.”
“This will likely affect major construction projects and the sector at large, although the extent of the impact will depend on the degree of forbearance exercised by creditors such as banks and financial institutions.”
“At the very least, though, we may see some delays in projects caused by key sub-contractors going bust.”
He also touched on the subject of performance bonds.
“These performance bonds typically secure up to the value of the project, so a call on the bonds will typically be financially deleterious for the contractors and sub-contractors.”
“Assuming that the relief period is not extended, there could be a significant increase of claims and legal proceedings brought by – and against – construction companies and more calls on performance bonds.”
To view the full article, click here.