Ho Bee Land says sale of industrial assets not related to SGX Regco’s query on debt load

HO Bee Land said late on Friday (Mar 17) that the recent sale of its industrial assets for S$115 million is not related to its debt load. 

The disposal is in the group’s “ordinary course of business”, the real estate company said in a bourse filing, which set out to flag multiple inaccuracies in an article published on investment news platform Mingtiandi.com on Mar 15.

The article with the headline “Singapore’s Ho Bee Land Sells Industrial Assets After SGX Queries Debt Load” alleged, among other things, that the group is disposing of HB Centre I on Tannery Road and HB Centre II on Tannery Lane as it faces a debt deadline, and is “paying to play”.

Ho Bee Land clarified that it had made no mention of proposed sale of assets to meet those short-debt debt obligations in its response to Singapore Exchange Regulation’s (SGX Regco) queries on Mar 10. 

“The timing of the disposal (announced on Mar 15) is totally unrelated to the SGX queries, and the news article contains statements which are pure speculation,” it added.

The allegations are “concerning” and “based on speculation and conjecture, causing reputational risk to the group”, it added.

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It went on to note that a sales option for the two properties were issued on November 2022, and the purchaser performed its due diligence and exercised the sales option on Mar 7. 

The disposal announcement was timed when all conditions for the disposal were satisfied on Mar 14. Market conditions are what drives the timing of acquisitions and disposals of investment properties, it stated, adding: “From time to time, the group receives unsolicited offers to purchase its properties.”

The response to SGX Regco was made upon receiving on Mar 8 three queries on its latest financial statement released on Feb 27.

The response noted that the main contributors to the group’s short-term debt of S$1.23 billion were bridging loans amounting to S$930.8 million that were used to pay for the acquisition of The Scalpel in FY2022, and S$94.5 million of a term loan that was due within 12 months from Dec 31, 2022.

The group was at the stage of finalising the loan documents for a S$810 million term loan, and the loan proceeds would be utilised for the repayment of the bridging loans. The response further pointed out that the refinancing of the S$94.5 million term loan was expected to be completed in the first half of this year.

Referencing that, Ho Bee Land said the response had stated how the group will meet its short-term debt obligations and included a “clear explanation” on the status of the refinancing of bank borrowings falling due within 12 months from Dec 31, 2022.

Ho Bee Land said it has contacted Mingtiandi’s journalist and managing editor requesting for the article to be corrected. 

Shares of Ho Bee Land closed down 0.5 per cent at S$2.23 last Friday.