Hatten Land Files Court Application Be Put Under Judicial Management
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Hatten Land has made a request to the General Division of the Singapore High Court to put the company under judicial management. The company has nominated Tan Wei Cheong and Lim Loo Khoon from Deloitte & Touche as its joint judicial managers to oversee its affairs, business and property. According to Section 95 of the Insolvency, Restructuring and Dissolution Act 2018, the company is automatically protected from any legal action or liquidation proceedings upon filing for judicial management.
During this period, no court orders or resolutions can be made for the winding up of the company, and its assets cannot be seized without the court’s permission. Furthermore, no other legal proceedings can be initiated or continued against the company, and no enforcement orders or processes can be issued.
In line with the application, Hatten Land has also requested for interim judicial management to be implemented. Trading of the company’s shares has been suspended since August 2, at the company’s request on August 5.
In an official statement on August 5, Hatten Land explained that the application for judicial management and interim judicial management was a proactive measure to facilitate their ongoing restructuring efforts and prevent any immediate actions by other creditors. This comes in light of recent developments, including the winding-up of one of its inactive subsidiaries.
This subsidiary, Prolific Properties Sdn. Bhd., has been dormant since the outbreak of the COVID-19 pandemic. The company has focused on its restructuring process and allocated its limited resources towards resuming construction at Harbour City. As of March 31, Prolific Properties had a net liabilities position of RM11.7 million ($3.5 million).
The main asset of Prolific Properties is a 2.05-acre land parcel in Melaka, intended for the development of Satori. The land is subject to a security granted to a Malaysian bank to secure its loan, which has an outstanding balance of approximately RM2.2 million ($0.66 million).
According to Hatten Land’s statement, construction at Satori was halted during the pandemic and remains incomplete. In a press release from July 2017, Satori was projected to be the state’s first wellness-themed mixed development with a gross floor area of 570,400 sq ft. It was to include 192 serviced suites, an 85,250 sq ft retail mall with a car park, a 336-room hotel, and over 50 facilities.
In a statement released on March 20, 2023, Hatten Land had cited the bankruptcy of Satori’s appointed contractor as the reason for the delay in construction. The contractor had eventually closed down. The company had planned to appoint a new contractor through a tender process and resume construction approximately six months after their other project, Harbour City.
In May this year, an independent professional valuer assessed Prolific Properties’ equity value at zero as of March 31 due to its negative net asset value. This assessment resulted from the land being in a net liabilities position.
Following this, Prolific Properties informed Hatten Land on August 1 that the Malaysian Court had issued a winding-up order against it, effective immediately. Consequently, an official receiver from the Insolvency Department of Malaysia has been appointed as the interim liquidator until August 29.
“Since the judicial management application and the interim judicial management application only affect the company, they are not expected to disrupt the operations of the company’s subsidiaries and business units, which will continue to operate under their respective management teams,” Hatten Land stated. “Given Prolific Properties’ net liabilities and zero equity value, the impact of its winding-up on the group is considered minimal.”
As per the last trading day, Hatten Land’s shares were trading at 1.1 cents.