A Singapore court granted an application for the appointment of a judicial manager (JM) over troubled NK Ingredients, Soilbuild Business Space REIT’s manager said in a filing to SGX Tuesday.
NK Ingredients, a tenant of the REIT, owes Soilbuild REIT S$3.39 million in rental charges, property tax and land rent, including August’s payment, the filing said, adding that exceeded the security deposit by S$834,924.
Another creditor of NK Ingredients, which processes lanolin, had applied to the court for the appointment, the filing said.
“Soilbuild REIT supported the JM Application as it was of the view that a judicial management of NK Ingredients could potentially facilitate a better realization of NK Ingredient’s assets as compared to a liquidation of NK Ingredients,” the REIT said.
“In support of the JM Application, Soilbuild REIT indicated that if a Judicial Manager was appointed, it was prepared to defer payment of NK Ingredients’ rent for a period of two months subject to certain conditions being met, to assist the judicial manager’s management of NK Ingredients’ cashflow,” the REIT added.
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.
In July, the REIT had said that if NK Ingredients is unable to fulfill its lease obligations and the manager is unable to lease out the space, second quarter distributable income and the distribution per unit were likely to fall 11.6 percent on a pro formal basis.
Yit Chee Wah, of FTI Consulting (Singapore), was appointed as judicial manager to manage NK Ingredients’ affairs, business and property, the filing said.