HPL: Horizon Towers Sellers Extend Deadline

Source : The Business Times, September 25, 2007

Buyer will now ask for adjournment of legal proceedings

Hotel Properties Ltd (HPL) has finally secured a much-needed extension of a deadline to purchase the Horizon Towers (Picture) development.

And the listed developer will now make good on its promise to apply for an adjournment of the legal proceedings it has commenced against the sellers.

HPL announced yesterday evening that the sellers of the Leonie Hill property have officially agreed - en masse - to push back the deadline by four months, to Dec 11. This will give HPL and its partners - who collectively agreed to buy Horizon Towers for $500 million in February - the time needed to push through the en bloc sale.

The deal had fallen through in August when the Strata Titles Board (STB) rejected Horizon Towers' application for a collective sale order - on the grounds that the application was defective.

STB's decision, which came just days before the original sale completion deadline, meant there was no time for a fresh application to be filed or for a High Court appeal of STB's judgment to be heard.

HPL and its partners - Morgan Stanley Real Estate-managed funds and Qatar Investment Authority - needed the sellers to extend the deadline, but its repeated requests in recent weeks went unheeded. The buyers then took legal action and sued the sellers for up to $1 billion in damages.

The situation reached a turning point when HPL chief Ong Beng Seng arranged a meeting with some 40 owners of Horizon Towers, at the Hilton last week. At this meeting, Mr Ong's lawyers Allen & Gledhill told the attendees that they would be prepared to adjourn the legal proceedings if the sellers agreed to extend the deadline - and that they would drop the lawsuit altogether if the sale goes through.

This meeting was followed by a second meeting at the Raffles Town Club the next day, which was attended by owners of 135 units of Horizon Towers. These owners decided to push back the collective sale deadline to Dec 11 and to do everything 'reasonably necessary' to effect the collective sale.

They told BT after the meeting that they would be reaching out to the owners of the remaining 42 units - who did not attend the meeting - to seek their support. Their efforts have apparently succeeded, judging by HPL's announcement yesterday.

HPL also told BT now that it has received official confirmation of the sellers' decision to extend the sale completion deadline, it would honour its promise to apply for an adjournment of the legal proceedings it has filed against the sellers. This means a Thursday court showdown between the buyers and the sellers will be averted. Up next is Friday's High Court hearing of the appeal against STB's decision.