Perennial Real Estate and Pontiac Land reach settlement on Capitol Singapore
Singapore
THE deadlock in the fate of Capitol Singapore is finally coming to an end after its major shareholders Perennial Real Estate Holdings Limited and Pontiac Land reached a settlement agreement.
The pact inked on Jan 3 provides a mechanism for either Perennial or Pontiac Land to purchase all of the others' shares in the iconic heritage property.
Perennial said on Wednesday that a settlement agreement was signed by its wholly owned subsidiaries Perennial (Capitol) Pte Ltd and New Capitol Pte Ltd, Perennial (Singapore) Retail Management, Pontiac Land's affiliate Chesham Properties, and Patina Hotels & Resorts Pte Ltd.
The sale and purchase of shares is expected to be completed within 19 weeks of the date of the settlement agreement.
Perennial explained that the proposed transaction should be regarded as being "in the ordinary course of business and therefore outside of the shareholders' approval requirements under Chapter 10 of the Listing Manual" because it will not result in a material change to the nature of the group's business nor will it change its risk profile.
Perennial also said it has received a letter from the Singapore Exchange dated Dec 8, which expressed "no objection" to its view that the proposed transaction is not subject to Chapter 10 of the Listing Manual. This was subject to a written confirmation from the board of directors at Perennial of their unanimous view that the proposed transaction is in the best interest of Perennial and does not alter the risk profile of Perennial; and Perennial announcing the board's view that the proposed transaction is in the ordinary course of the group's business.
Acrimonious disputes between the co-owners of Capitol Singapore over some key issues of the project had earlier resulted in Perennial seeking court action to wind up three associated companies, which are equally owned by Perennial (through Perennial Capitol and New Capitol) and Pontiac Land (through Chesham Properties).
But Perennial lost the case and made its appeal. The Court of Appeal dismissed Perennial's appeal against the Hight Court's decision last November.
The soured relationship between Perennial and Pontiac Land has stunted the progress of the iconic development. The impasse also led to a delay in the opening of the six-star hotel, The Patina, which got its temporary occupation permit in October 2015, but remains unopened as Perennial CEO Pua Seck Guan allegedly refused to countersign payments for various expenses incurred by the hotel.
The Straits Times reported that the hotel needed at least another S$11.5 million to be pumped in to start operations.
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