SC Aetas (Cayman), owner of the Orchard Hills/Orchard Hills Residences property, has failed to resume paying principal and interest on its S$110 million in defaulted mezzanine notes, and the consortium which acquired the notes has taken ownership the company’s share capital, Boustead Projects said Friday.
In August, Boustead Projects’ wholly owned subsidiary BP-Real Estate Investments, along with Roark Capital and Lim Teck Lee Investments, formed a consortium to acquire the defaulted notes for S$117 million, marking a discount to the principal and accrued default interest.
“While the consortium now holds 100 percent of the company’s capital, the proposed acquisition of the property is pursuant to any enforcement proceedings, or pursuant to an auction or bilateral sale process. It is intended that the parties within the consortium will hold interests in the property in proportion to their holdings of the notes,” Janet Chia, manager for corporate marketing and investor relations at Boustead Projects, told Shenton Wire via email on Friday.
BP-Real Estate Investments acquired 50 percent of the notes, while Roark Capital and Lim Teck Lee Investments, which are both investment holding companies of private investors unrelated to Boustead Projects, purchased 25 percent each.
SC Aetas (Cayman) owns the property at 30 Bideford Road, Singapore, known as Orchard Hills/Orchard Hills Residences, which has an 18-storey mixed-use development including hospitality, healthcare and commercial areas.
Based on an audit of SC Aetas (Cayman)’s financial statements for 2020, the property’s carrying value is S$605.36 million, Boustead Projects said Friday in a filing to SGX. That compares with Boustead Projects’ August statement that the carrying value was at S$720.19 million. In August, Boustead Projects said Orchard Hills was not losing money nor did it have a net liability position.
The notes were issued 30 July 2019, with a rate of 13 percent per annum, and had an original maturity date of 12 months, which was extended to end-November 2020, with the issuer able to redeem the notes at any time for 100 percent of the principal, Boustead Projects had said in August. But at the time, the notes were in default on payments of interest and principal, which, under the original terms, means the interest rate was to rise to 18 percent per annum.