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Sasseur Reit's subsidiary sued in China for 148.4m yuan, legal costs
A SUBSIDIARY of Sasseur Reit is being sued in China over a disagreement of the final construction sum payable in respect of Sasseur (Hefei) outlets which was completed in May 2016.
Zhongjian Sanju No 2 Construction Engineering Co (ZS2), the plaintiff, is claiming about 148.4 million yuan (S$29.5 million) and its legal costs.
ZS2 had also sought and obtained interim orders from the courts to freeze some of the bank accounts of Sasseur Hefei, the subsidiary, in China.
Sasseur Hefei has applied and successfully gotten the same courts to strike out the previous orders for the freeze, resulting in the freeze on its key bank accounts to be lifted.
As such, Sasseur Asset Management, which manages Sasseur Reit, is of the view that there will not be any disruptions to the operations of Sasseur Hefei and Hefei Outlets.
Sasseur Cayman Holding Ltd, together with its subsidiary Sasseur Cayman Holding II Ltd and DBS Trustee Ltd, had entered into a sales and purchase agreement (SPA) on Nov 16, 2017 to acquire Hefei Outlets.
Pursuant to the SPA, Sasseur Cayman Holding had irrevocably and unconditionally undertaken to indemnify Sasseur Reit against, among other things, any losses that Sasseur Reit and its subsidiaries may suffer in connection with additional construction payables that were not already provided for in the SPA, said Sasseur Asset Management in an Exchange filing.
As the amount of 117.5 million yuan had been previously provided for in the SPA in respect of the construction accounts payables incurred by ZS2, the claim of 148.4 million yuan represents an additional 30.9 million yuan over the corresponding amount already provided for in the SPA.
Sasseur Asset Management said that the legal proceedings are not expected to have any material impact on Sasseur Reit's distribution per unit for the current financial year ending Dec 31, 2018.