Hatten Land gets notice of default, letter of demand for RM14 million, appoints financial adviser

MDSA Resources, an indirect wholly owned subsidiary of Hatten Land : PH0 0%, has received a notice of default and a letter of demand from Kenanga Investment Bank for a total of RM14,114,652.15 (S$4 million), it said on Thursday (Mar 28).

The sum owed was in relation to Hatten Land’s medium-term note (MTN) programme.

Hatten Land has engaged Deloitte & Touche Financial Advisory Services to develop a restructuring plan and explore fundraising strategies amid its financial challenges.

The notice of default from the trustee representing Kenanga Investment Bank – the principal adviser, lead arranger, lead manager and facility agent of the MTN programme – was in relation to the RM12,350,000 Notes issued by MDSA Resources under the programme.

The sum of RM12,350,000 and RM492,646.58, being the outstanding principal sum and coupon of the programme respectively, should be paid to the trustee no later than Apr 5, 2024, said the notice, dated Mar 25, 2024.

MDSA Resources also received a letter of demand dated Mar 25 from the solicitor representing Kenanga in relation to the MTN programme, for the outstanding amount of RM1,272,005.57 as at Mar 20.

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This sum, together with late payment interest accrued at 10 per cent per annum from Mar 21, 2024, till the date of full settlement, should be paid to Kenanga no later than seven days from the date of the letter, the letter said. 

The notice and letter are the latest in a series of financial troubles for the real estate developer. The company, or its subsidiaries, have also received notices or letters from Haitong International Financial Products (Singapore), Bank Kerjasama Rakyat Malaysia, certain bondholders and HSBC Bank.

Haitong International asked for US$21.5 million, Bank Kerjasama Rakyat Malaysia demanded RM60 million, bondholders sought US$23 million, and HSBC Bank is looking for RM6 million.

Hatten Land “remains committed in engaging proactively with Kenanga” with its financial adviser’s assistance to resolve the matter, it said.

The company’s controlling shareholders have entered into a term sheet with a reputable financial institution in Singapore in their personal capacity for fundraising facilities, which will be secured with their personal assets, Hatten Land added. This is meant to provide a shareholders’ loan to the company for it to repay its secured bonds.

It is currently at the legal documentation stage.

“Barring any unforeseen circumstances, the group expects to drawdown the fundraising facilities in FY2024.” 

On whether it has resolved issues relating to previous letters of demand, Hatten Land said it continues to engage its lenders.

Hatten Land has requested its trading halt to be lifted after the announcement. The counter closed at S$0.011 on Mar 25, when it was last traded.