HPL: Horizon Towers Sales Committee Tried To Scupper Deal

Source : The Business Times, September 7, 2007

(SINGAPORE) Several members of the Horizon Towers sales committee tried to scupper the en bloc sale by rallying the rest of the majority sellers into going back on their collective agreement, according to an affidavit filed in the High Court yesterday by the buyers.

The claim is one of several in the late-night filing made yesterday by Hotel Properties Ltd (HPL), Morgan Stanley Real Estate-managed funds and Qatar Investment Authority.

HPL and its partners had in February signed a deal with 84 per cent of the owners of Horizon Towers to buy the Leonie Hill property en bloc for $500 million. The sale fell through last month when the Strata Titles Board (STB) refused to grant a collective sale order, saying that Horizon Towers had filed a defective application.

HPL and its partners, through their lawyers Allen & Gledhill, are suing the majority sellers for failing to file a proper application.

In its affidavit - a copy of which was obtained by BT - HPL and its partners alleged that some members of the Horizon Towers sales committee tried to defeat the collective sale by encouraging the other majority sellers to go back on the agreement.

The affidavit said an anonymous circular was sent to all residents of Horizon Towers in late April. The circular said: 'If enough like-minded owners rescind the agreement and the majority falls below 80 per cent, the application to the STB can be repealed . . . With cohesive cooperation, this movement can be successful.'

The circular included a blank 'Letter to rescind participation in the collective sale agreement of Horizon Towers' and urged owners to send their replies to two mailboxes - which the affidavit claims belong to two current members of the sales committee.

The affidavit also quoted from other anonymous flyers sent to the residents of Horizon Towers, which said the sellers were being paid a 'paltry sum' for their development.

HPL and its partners charge that some of the sellers want to back out of the deal because they were unhappy with the price offered for the development.

There had been several media reports that some sellers regretted their decision to sell Horizon Towers to HPL and its partners for $500 million, when neighbouring developments - such as The Grangeford - subsequently sold for double the per-square-foot amount.

The buyers' case is that the majority sellers of Horizon Towers did not do their utmost to submit a proper application for a collective sale order to the STB.

They said the sellers filed the application only in April - two months after the deal was signed, and just four months ahead of the deadline for the completion of the sale. The buyers said this was a 'breach of (the sellers') express obligation to apply expeditiously for the collective sale order'.

They also claim the sellers were ambivalent about the dates for the STB hearing and were slow in releasing documents which the objectors - the minority sellers who objected to the en bloc sale - had requested.

This affidavit comes just ahead of a meeting today of all the majority sellers of Horizon Towers. They are meeting to decide how they should respond to HPL's suit.

The sellers need to decide if they should accede to HPL's demand that the sellers extend the deadline of the sale by four months, appeal against the STB's decision and file a fresh application to the STB, if necessary. Alternatively, they can contest the suit.