Hatten to issue S$3.5m in new shares to landlord to pay for Singapore office rental

HATTEN Land is proposing to issue new shares to its landlord as payment for an upcoming rental of S$3.5 million, in a bid to preserve cash during the Covid-19 pandemic.

The estimated rental is for the period from Aug 1, 2020, to June 15, 2025, and is for the property developer's office in Singapore, it said in a regulatory update on Monday night.

Hatten Land has agreed to allot and issue 60.4 million new ordinary shares in the capital of the company at an issue price of 5.75 Singapore cents apiece.

Once the new shares are allotted and issued, the company's issued and paid-up share capital will increase to 1.6 billion shares from 1.5 billion shares. The new shares represent about 3.93 per cent of the existing share capital and around 3.78 per cent of the enlarged share capital.

The issue price represents a premium of about 6.28 per cent to the volume-weighted average price of 5.41 Singapore cents, based on trades done on the company's shares on the Singapore Exchange on Aug 31, the full market day which the rental supplemental agreement was signed.

As part of the rental supplemental agreement, the landlord - Link (THM) BIZ MS - has agreed not to dispose any part of its shareholding interests in the company for one year starting Aug 31. It will only be allowed to dispose of up to half of the new shares with the remaining half subject to another one-year period of moratorium.

As the issuance of new shares falls within the limits of a share-issue mandate obtained during the company's fiscal 2019 annual general meeting held on Nov 23, 2019, the company has authority granted by shareholders to issue the new shares to its landlord.

Hatten Land further disclosed that the shareholders of Link (THM) BIZ MS are not related to any of its directors, substantial shareholders or their respective associates.

Shares of Catalist-listed Hatten Land closed down 0.7 Singapore cent or 11.5 per cent to 5.4 cents on Monday.