Soilbuild REIT: NK Ingredients in default of lease after July payment not received

Singapore 50 dollar bill

Soilbuild Business Space REIT said Wednesday that tenant NK Ingredients is in default of its lease agreement for failing to pay rent and other sums.

NK Ingredients did not immediately respond to Shenton Wire’s emailed request for comment, which was sent outside of office hours.

In May, the Singapore court had extended the lanolin processor’s moratorium on actions by creditors through 22 July, subject to conditions which included NK Ingredients paying the rental charges, property tax and land rent for June and July on the first day of those months, Soilbuild REIT said in a filing to SGX.

“NKI has paid the rent for June 2019. As at 2 July 2019, payment for the July 2019 rent has not been received,” the REIT said. “Accordingly, Soilbuild REIT has written to Court to state that the condition for the moratorium obtained under section 211B of the Companies Act has been breached and that this moratorium has lapsed.”

As of Wednesday, NK Ingredients owes Soilbuild REIT S$2.83 million, including the July rent, while the REIT is holding a security deposit of S$2.56 million, the filing said.

The amount owed exceeds the security deposit by S$271,966, equivalent to around a half month’s rent, the filing said.

Going forward, Soilbuild REIT’s manager said it would will monitor the application by another NK Ingredient creditor to appoint a judicial manager over the company.

“Pursuant to the JM Application, no proceedings and no execution or other legal process may be commenced or continued against NK Ingredients for the time being,” the REIT said.

The NK Ingredients property, located at 2 Pioneer Sector 1 in Singapore, made up 6 percent of fourth-quarter gross revenue and takes up 4 percent of the portfolio by asset value, according to the REIT’s fourth-quarter earnings presentation. It contributed 6.2 percent of monthly gross rental income, the presentation showed.

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