Hatten Land Files Court Application Be Put Under Judicial Management
Hatten Land has recently made a submission to the General Division of the Singapore High Court to be placed under judicial management. The company has requested for Deloitte & Touche’s Tan Wei Cheong and Lim Loo Khoon to be appointed as its joint judicial managers to oversee its operations, business and assets. This application has been made under section 95 of the Insolvency, Restructuring and Dissolution Act 2018, which automatically places a moratorium on the company from the point of filing the judicial management application.
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During this moratorium period, no order can be made and no resolution can be passed to wind up the company. The company’s assets and goods cannot be seized except with the permission of the court. No further legal proceedings can be initiated or continued against the company and no enforcement order or other legal process can be issued.
As part of the application, Hatten Land has also requested for interim judicial management to be granted. Trading in Hatten Land’s shares has been suspended since August 2, and the company has requested for this trading halt on August 5.
In a statement released on August 5, Hatten Land has stated that the judicial management application and the interim judicial management application have been submitted as a proactive measure to support the ongoing restructuring efforts and avoid any potential actions from other creditors. This decision was made in light of recent developments within the group, including the liquidation of an inactive subsidiary.
The inactive subsidiary referred to is Prolific Properties, which is an indirect wholly-owned subsidiary of Hatten Land. Due to the COVID-19 pandemic, this subsidiary has been inactive as the group prioritized its restructuring process and focused its limited resources on resuming construction at Harbour City. Prolific Properties has a net liability position of RM11.7 million ($3.5 million) as of March 31. Its main asset is a 2.05-acre parcel of land in Melaka, which is designated for the development of Satori. This land is currently secured by a Malaysian bank loan, with an outstanding balance of around RM2.2 million ($0.66 million).
According to Hatten Land, construction has not yet been completed at Satori and work was halted during the pandemic. In a press release from July 2017, Satori was supposed to be the first wellness-themed mixed development in the state. The project was expected to have a gross floor area of 570,400 sq ft, with 192 serviced suites, an 85,250 sq ft retail mall, a 336-room hotel, and over 50 amenities.
In March 2023, Hatten Land released a statement saying that the delay in Satori’s construction was due to its appointed contractor filing for bankruptcy. This contractor eventually closed down. The company was in the process of looking for a new contractor and expected construction to resume around six months after work resumed at another project, Harbour City.
In May this year, an independent professional valuer estimated that Prolific Properties had zero equity value as of March 31, due to its revalued net asset value being in a net liability position.
On August 1, Prolific Properties informed Hatten Land that the Malaysian Court had issued a winding-up order against the company, effective immediately. The court has also appointed an official receiver from the Insolvency Department of Malaysia as the interim liquidator until August 29 .
Hatten Land has stated that the judicial management and interim judicial management applications only pertain to the company, and it is not expected to disrupt the operations of its subsidiaries and business units as they will continue to operate under their respective management teams. Due to Prolific Properties’ negative equity and net liabilities, the impact of its liquidation on the group is considered insignificant.
As of this writing, Hatten Land’s shares last traded at 1.1 cents on the stock market.