The Straits Times | 06 Apr 2013 11:40 PM
Judicial managers have 60 days to present proposal
The High Court has approved an appeal by cash-strapped Poh Lian Construction to have judicial managers appointed.
The decision gives it some respite from creditors and enables it to avoid being wound up.
The 45-minute court hearing yesterday was witnessed by seven of Poh Lian's creditors, ranging from subcontractors to property developers.
Judicial managers Tam Chee Chong and Andrew Grimmett of audit firm Deloitte have 60 days to present a recovery proposal to the creditors. They will work to ensure a smooth transition for stalled projects, investigate alleged mismanagement of funds and source investors to buy out Poh Lian.
The firm's assets include a Building and Construction Authority class A1 licence, which allows it to bid for projects with no upper limit.
An affidavit filed by the judicial managers on Tuesday stated that Poh Lian's debt rose to $92.3 million in February, up from $60.6 million a month earlier. The figure excludes $82 million in contingent liabilities that the firm might owe developers if it fails to complete projects by the deadlines agreed on. Poh Lian, a unit of United Fiber System, was building some private and public residential projects and upgrading St Anthony's Canossian Secondary School before work stopped last month.
City Developments terminated its contract with Poh Lian and appointed Woh Hup as the new main contractor for H20 Residences on April 3.
Developer GuocoLand terminated both the Goodwood Residence and Sophia Residence projects with Poh Lian.
GuocoLand said it is informing buyers of units at Goodwood Residence that it has appointed Lian Beng Group as the main contractor. Work resumed on April 2. The project will get its temporary occupation permit no later than in the fourth quarter of this year, said a spokesman for the developer.
GuocoLand is in final talks with a new contractor for the Sophia Residence project and will update buyers when the deal is complete.
It will engage independent consultants to ensure that quality is not compromised on either project.
Poh Lian was also in charge of building two Housing Board Build-to-Order projects - Segar Grove and Senja Gateway. HDB said yesterday that Segar Grove's estimated completion date as communicated to buyers is in the fourth quarter.
It terminated its contract with Poh Lian yesterday and is seeking a new contractor. It said Senja Gateway should be finished in the third quarter.
HDB is working with the judicial managers to see how the work can continue, while sourcing for an alternative contractor should the judicial managers' proposal fall through.
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