Hatten Land has filed a supplemental affidavit with the Court of Singapore, providing more details relating to its interim judicial management application. The hearing has been fixed for Aug 21 at 9.45am.
In an Aug 19 bourse filing, Hatten Land PH0 says its wholly-owned subsidiary GMSB had received a notice of appointment stating Victor Saw Seng Kee and Surendran A/L Sathya Seelan as joint and several receivers and managers over “all or any of the security assets as defined in the debentures of GMSB”.
Saw and Surendran have been appointed by the lender, the holder of debenture dated Dec 15, 2015 and specific debenture dated Nov 16, 2018. The notice of appointment was lodged with the Companies Commission of Malaysia.
The principal consequence of the notice of appointment is that the powers of GMSB’s directors to manage and deal with GMSB’s charged assets are suspended. In this respect, the directors of GMSB are not able to continue to carry on GMSB’s business in any way nor enter into any commitment on behalf of GMSB without the receivers and managers or its representatives’ prior written approval.
Hatten Land says it is currently seeking legal advice on this matter.
Judicial management
See also: Hatten Land files court application to be put under judicial management
Earlier this month, Hatten Land filed an application in the General Division of the Singapore High Court to place the company under judicial management.
The company also proposed for Deloitte & Touche’s Tan Wei Cheong and Lim Loo Khoon to become its joint judicial managers to manage its affairs, business and property.
Hatten Land also applied to be placed under interim judicial management.
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“The judicial management application and the interim judicial management application have been filed as a proactive measure to facilitate the ongoing restructuring efforts and to forestall any possible precipitate action by other creditors, in light of the latest developments of the group including the winding-up of an inactive subsidiary,” said Hatten Land in its Aug 5 statement.
The inactive subsidiary refers to Hatten Land’s indirect wholly-owned subsidiary, Prolific Properties Sdn. Bhd. Prolific Properties has been inactive since Covid-19 as the group prioritised the restructuring process and focused on its constrained resources on resuming construction at Harbour City. Prolific Properties was in a net liabilities position amounting to RM11.7 million ($3.5 million) as at March 31.
Prolific Properties’ main asset is a 2.05-acre parcel of land in Melaka, which is for the development of Satori. The parcel is subject to a security granted to a Malaysian bank to secure its loan. The loan’s outstanding balance is around RM2.2 million or $0.66 million.
According to Hatten Land’s statement, Satori has not completed construction and work was halted during the pandemic. In a press release issued in July 2017, Satori is supposed to be the state’s first wellness-themed mixed development. The development was to have a gross floor area (GFA) of 570,400 sq ft comprising 192 serviced suites, an 85,250 sq ft retail mall with an adjoining car park, a 336-room hotel and over 50 facilities.
Hatten Land, in a statement issued on March 20, 2023, said that the delay in Satori’s construction at the time was due to Satori’s appointed contractor filing for bankruptcy. The said contractor eventually shut down. At the time, Hatten Land said that it was working on a tender to appoint a new contractor and expects construction to resume around six months after its other project, Harbour City, resumes construction.
In May this year, an independent professional valuer valued Prolific Properties’ equity value at zero as at March 31. The valuation stemmed as a result of its revalued net asset value being in a net liabilities position.
Prolific Properties, on Aug 1, informed Hatten Land that the Malaysian Court made a winding up order against the former effective on the same day.
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Consequently, the Malaysian Court has appointed an official receiver from the Insolvency Department of Malaysia as the interim liquidator with immediate effect until Aug 29.
“As the judicial management application and the interim judicial management application relate only to the company, it is not expected to disrupt the operations of the company’s subsidiaries and business units as they continue to operate under their respective management teams,” Hatten Land says. “Given Prolific Properties’ net liabilities and zero equity value, the net impact of its winding-up on the group is considered insignificant.”
Trading in Hatten Land’s shares has been halted since Aug 2. Shares in Hatten Land last traded at 1.1 cents.
