Monday, May 18, 2009

Gillman Heights site sale: last-minute hurdles cleared

Lawyers for both buyers and sellers look at the new deadline of May22

(SINGAPORE) The consortium that bought the Gillman Heights condo site in a collective sale has 'every intention' of completing its purchase, its lawyers said in a statement.

While the sale was not completed by the previous deadline of May 15, lawyers for the buyers and sellers are now looking at the new deadline of May 22 after two last-minute hurdles were cleared.

The buyer of Gillman Heights - a group called Ankerite, which is led by property giant CapitaLand - was supposed to have completed the $548 million purchase last Friday.

But the sale of the 99-year-leasehold estate on Alexandra Road, which has dragged on for two years now, has not been signed off yet. The deal was first inked in 2007.

Ankerite's lawyers, Rajah & Tann, had on April 30 queried the sales committee on two issues, which have since been resolved. With those obstacles cleared, Rajah & Tann is now working with the sales committee's lawyers from Lee and Lee to close the deal as soon as possible.

'The lawyers of both parties are working towards May 22, 2009 to complete the purchase of the site,' said a CapitaLand spokeswoman yesterday.

One sticking point was the transfer of $750,000 from the management corporation's (MCST) management fund to the sinking fund in August 2007 and March 2008, which was discovered during the due diligence exercise.

Rajah & Tann wanted the money transferred back into the management fund, as money from this fund goes to the buyers upon the completion of the sale.

This issue has since been resolved. Rajah & Tann said in its statement that the money will remain in the management fund, as the management council of the MCST has annulled its previous resolutions transferring money to the sinking fund.

The second contentious point was a separate suit by a local contractor against the MCST. But this appears to have been settled as well. Rajah & Tann said that on Saturday it received a copy of the settlement agreement signed by the MCST's solicitors and the solicitors for the contractor.

Ankerite initially comprised CapitaLand, Hotel Properties and two private funds, but CapitaLand will buy up another 5.5-10 per cent of the company from the stake now held by one of the private funds. This will make Ankerite a CapitaLand subsidiary.

The sale of Gillman Heights finally got the go-ahead in February this year after the Court of Appeal dismissed a last-ditch plea by minority owners to overturn the deal. Earlier reports had indicated that owners of the estate's 607 units stood to receive between $870,000 and $950,000 for their apartments.

Source: Business Times, 18 May 2009

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