ETC Singapore resolves dispute with controlling shareholder through property disposal

CATALIST-listed Emerging Towns & Cities Singapore (ETC Singapore) has entered into a settlement deed with controlling shareholder Luo Shandong to clear all disputes and claims between them.

ETC has agreed to discontinue its lawsuits in Singapore and China against Mr Luo, relating to his unauthorised withdrawals of 118 million yuan (S$23.8 million) from funds held by Huizhou Daya Bay Mei Tai Cheng Property Development Co last year.

ETC owns 60 per cent of Huizhou Daya Bay through its unit Cedar Properties. Huizhou Daya Bay comprises 717 apartment units and another 399 holiday rental apartments in Huizhou, Guangdong.

In exchange, Mr Luo has agreed to use his best efforts to withdraw a requisition notice sent to ETC on Dec 14 that calls for an extraordinary general meeting (EGM) to remove two ETC directors.

To allow ETC to set off some of the amount due to Mr Luo under a convertible loan agreement, Mr Luo has also agreed to purchase ETC's stake in Cedar Properties.

The sale price will be decided later, and shareholders must also approve the proposed transaction at an EGM to be held later.

Cedar Properties had a book value and net tangible assets of S$14.8 million as at Sept 30, 2017. It made a net loss of S$2.1 million in the third quarter last year.

ETC will make a further announcement setting out the pro forma financial effects of the proposed disposal of Cedar Properties once the price has been agreed upon.

Mr Luo has also agreed to extend the deadline for ETC to repay him a sum of around US$23.9 million as part of the convertible loan agreement. The sum would have been due on April 25, 2018 but Mr Luo is giving ETC a 12-month extension to April 25, 2019.

Mr Luo will also transfer his 15.5 per cent interest in ETC to Zhu Xiaolin and/or another third party within seven days from Thursday.