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TT Int'l new scheme of arrangement wins creditors' approval

TT International's latest scheme of arrangement proposed to creditors has won the necessary approval following the voting by creditors conducted on Thursday, it said on Thursday, bringing a near end to a long-drawn debt restructuring process for the retail firm.

The scheme, announced on July 31, was built on TT International selling in full 10 wholly owned subsidiaries of the group involved in furniture and consumer electronics sales, for a sum of S$48 million. These units were being sold to Celestial Palace, a company incorporated in Seychelles that invests in consumer electronics products, furniture as well as mid to high-end luxury goods.

They excluded the well-known retail space Big Box Singapore, of which TT International owned 51 per cent. In mid-September, TT International said that it would wind up Big Box Singapore, thereby liquidating the business. 

The new scheme of arrangement would use most of the proceeds from the sale of the 10 units to ensure that the existing scheme creditors receive a full recovery of the secured portion of their liabilities. As for the company’s unsecured creditors, TT International said the new scheme of arrangement would give these creditors a higher recovery compared to a liquidation scenario.

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In return for the payment under the new scheme, all liabilities due to the relevant creditors under the previous scheme of arrangement were to be fully discharged and released, as per the terms of the new scheme of arrangement.

As at July 27, the total indebtedness due to the existing scheme creditors was about S$268.2 million, and to other creditors, S$193.8 million. The company has been under its last scheme of arrangement for close to eight years, and in its regulatory filing announcing the new scheme of arrangement, TT International said that "the present liabilities of the company owing to its creditors are not sustainable without an urgent restructuring of the company’s liabilities".

It added that the shrinking of its balance sheet with the proposed scheme of arrangement would allow the company to pursue post-restructuring business directions as a going concern. 

On Thursday, about 90 per cent of the creditors voted in favour of the new scheme of arrangement. Those votes translated to about 80 per cent of the value of the debt involved.   

Shares in TT International have been voluntarily suspended since Aug 4, 2017.