Hatten Land Files Court Application Be Put Under Judicial Management
Hatten Land has recently applied to the General Division of the Singapore High Court to place the company under judicial management. As part of this application, Hatten Land has proposed Deloitte & Touche’s Tan Wei Cheong and Lim Loo Khoon to be appointed as joint judicial managers to manage the company’s affairs, business, and property. This move is made under section 95 of the Insolvency, Restructuring and Dissolution Act 2018, which automatically places a moratorium on the company from the filing of the judicial management application.
During this moratorium, no order or resolution can be made for the winding up of the company, and its property and goods cannot be taken without the permission of the court. Also, no other legal proceedings can be commenced or continued against the company, and no enforcement order or legal process can be issued.
In connection with this application, Hatten Land has also applied to be placed under interim judicial management. The trading of Hatten Land’s shares has been halted since Aug 2, and the suspension was officially requested on Aug 5.
Hatten Land explains that the judicial management application and the interim judicial management application are proactive measures to facilitate their ongoing restructuring efforts and to prevent any potential action from other creditors. This is in light of the latest developments within the group, including the winding up of an inactive subsidiary.
The inactive subsidiary refers to Hatten Land’s indirect wholly-owned subsidiary, Prolific Properties Sdn. Bhd. This subsidiary has been inactive since Covid-19 as the group has been prioritizing the restructuring process and focusing its constrained resources on resuming construction at Harbour City. Prolific Properties currently has a net liabilities position of RM11.7 million ($3.5 million) as of March 31.
One of Prolific Properties’ key assets is a 2.05-acre parcel of land in Melaka, which was intended for the development of Satori. This parcel is currently subject to a security granted to a Malaysian bank to secure its loan, which has an outstanding balance of around RM2.2 million or $0.66 million.
According to Hatten Land, construction for Satori was halted during the pandemic as the appointed contractor went bankrupt and eventually shut down. In a press release issued in July 2017, Satori was set to be the state’s first wellness-themed mixed development with a gross floor area of 570,400 sq ft. However, the project has not been completed as scheduled.
In March 2023, Hatten Land had mentioned that construction for Satori was delayed due to the bankruptcy of the appointed contractor and that they were in the process of appointing a new one. Construction was expected to resume approximately six months after their other project, Harbour City, resumed construction.
In May this year, Prolific Properties’ equity value was valued at zero as a result of its revalued net asset value being in a net liabilities position. Recently, the Malaysian Court has made a winding up order against Prolific Properties, effective on Aug 1. As a result of this, an official receiver from the Insolvency Department of Malaysia has been appointed as the interim liquidator until Aug 29.
However, as the judicial management application and the interim judicial management application only relate to Hatten Land and not its subsidiaries or business units, the company expects minimal disruption to their operations. Hatten Land also assures that the winding-up of Prolific Properties will have an insignificant impact on the group’s overall operations.
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Currently, shares in Hatten Land are trading at 1.1 cents.