Hatten Land says can repay RM206m short-term term borrowings with its unsold completed properties
CATALIST-LISTED Hatten Land PH0 stated that the borrowings of RM206 million (S$66.4 million) due in a year could be repaid as its unsold, completed properties are worth a "substantial value".
In its response to queries from the Singapore Exchange (SGX), Hatten Land said on Friday (Mar 11) that the estimated market value of its development properties - excluding those of Gold Mart - stood at RM780.8 million as at Jun 30, 2021.
The company said sale of its development properties to generate cash flow is its priority to repay loans and borrowings amounting to RM206 million recorded as current liabilities in the financial statements for the quarter to December 2021.
The completion of the disposal of Gold Mart will also generate gross proceeds of about US$60 million, which will allow it to redeem some loans and borrowings.
The company has not, however, seen the payment for the proposed sale coming from counterparty Tayrona Capital Group, which has nonetheless provided assurance to Hatten Land that it remains keen and committed to completing the deal on Gold Mart.
Also, it is confident it could add new streams of revenue from new business initiatives such as blockchain technology, and its property and hospitality activities would improve as the economy reopens.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
On concerns of whether its current assets are adequate to meet its short-term liabilities of nearly RM1.1 billion, Hatten Land said it has current assets amounted to RM1.2 billion, including RM11.7 million in cash and RM446.7 million worth of development properties.
The company is working to monetise these properties as well as to accelerate collection of the current trade and other receivables of RM166.2 million.
The current liabilities could decline by RM486.3 million when the disposal of Gold Mart is completed, it noted.
"The company has a repayment plan with the creditors and certain bankers, and the company is on track to fulfilling these obligations," it said.
Following its assessment, Hatten Land changed the payment term for some property buyers, and therefore these current trade receivables were turned into non-current ones due to the continuing challenges affecting the property market in Melaka and uncertainties brought by the pandemic.
The company assured that its non-current trade receivables do not have material concentration risk from a particular debtor as many individual property buyers are involved.
"As these units can be relisted for sale in the event that a purchaser decides to terminate the purchase of the units if the bank loan or financing application is not granted, the board does not foresee any issues with the collection of the outstanding trade receivables."
Similarly, the impairment loss recorded in the latest financials has risen as buyers had revoked the sales and purchase agreement, but the apartments related to this RM 7.6 million impairment could be relisted for sale, Hatten Land explained.
The counter ended flat at S$0.04 on Friday.
Copyright SPH Media. All rights reserved.
