THE deadline for Jurong Country Club's (JCC) debenture noteholders to accept JTC's offer of an early purchase of their notes has been extended from Sept 23 to 30 days after the membership compensation has been doled out to club members.
This is to address noteholders' anxiety stemming from a clause in the constitution that states that if the notes are sold or transferred without a simultaneous transfer of the membership, the membership will cease.
Noteholders therefore worried that this discontinuance in their membership would deprive them of the land compensation amount from the Singapore Land Authority (SLA), which is acquiring the land for the development of the Singapore-Kuala Lumpur high-speed-rail terminus. They also raised these concerns at a briefing that JTC held on Sept 1.
In a copy of the letter obtained by BT, JTC said that after that briefing, it had sought formal clarification from the JCC general committee regarding the club's position on whether noteholder members who sell or transfer their notes to JTC would be entitled to a share of the land compensation amount.
The short answer is no. The general committee, through law firm Rajah & Tann, responded that the constitution requires that any sale or transfer of a note be accompanied by a simultaneous transfer of the associated membership to the same person (JTC, in this case). Otherwise, the membership will cease.
This thus spurred JTC to review its offer "towards the best interest of noteholders". But the purchase price for the notes remains S$84,200, a discount from the par value of S$120,000 - which remains a sore point with noteholders, who want to be paid back in full on the non-interest-bearing unsecured notes.
In a statement to BT, a JTC spokesman said: "Following the issuance of our offer to purchase the notes, the Debenture Noteholders Working Committee (DNWC) and noteholders expressed their concerns that noteholders may lose their compensation from the Club for their club membership, should they accept JTC's offer to purchase the notes.
"After clarification with the Club, JTC decided to extend the validity of our offer to 30 days after the noteholders have received their compensation . . . With this extension, noteholders can take this time to assess our purchase offer for the notes and make their decision after they have received their compensation."
Asked to give an update on the land compensation negotiations, an SLA spokesman said: "SLA made an advance payment of 40 per cent of the compensation to JCC on March 15, 2016, and the balance payment will be made upon site possession next year. This is independent of the appeal proceedings which are currently ongoing."
JCC is appealing for a higher compensation than the S$89.8 million awarded to it by SLA. The club has submitted a claim for S$168.1 million.
The compensation payment takes place separately from the appeal proceedings, as the government has to follow a timeline in accordance with the construction schedule of the rail terminus. If the appeal proceedings are successful, the compensation will then be topped up. The SLA spokesman declined to say when exactly in 2017 the remaining 60 per cent will be paid.
While Lim Hung Siang, chairman of the DNWC, said he was "glad" about the extension of the offer's expiry date, he felt even more vindicated about being proven right on his earlier claim that the notes and the membership are "bundled" - which supports his case that the land compensation and notes redemption should be paid together, and that the latter should be paid in full.
In a statement to BT, he said: "If not extended, a noteholder would lose his membership and compensation if he were to accept JTC's first offer. In addition, he would also have to incur the transfer cost of S$21,400 (including GST) for his membership.
"This shows clearly that the notes and the membership are bundled together - as we have highlighted all along. The repurchase price in JTC's revised offer still remains at S$84,200, which will not be acceptable to the majority of the noteholders.
"The DNWC is still engaging JTC to negotiate for an amicable solution so that both parties can move on."