Perennial may appeal against dismissal of winding-up applications

SINGAPORE (March 6): The high court has dismissed the winding-up applications for three of Perennial Real Estate Holdings’ associated joint venture (JV) companies, namely: Capitol Investment Holdings, Capitol Retail Management and Capitol Hotel Management.

Each of the three associates is effectively 50% owned by Perennial and Ron Sim of Osim International. The remaining 50% is held by Chesham Properties, an affiliate of luxury developer Pontiac Land Group.

The winding-up applications were filed last year by Perennial Real Estate Holdings’ wholly-subsidiaries, Perennial (Capitol) and New Capitol, following project disagreements with Chesham.

In a filing to the Singapore Exchange (SGX) last Friday, Perennial mentions that the high court’s decision of dismissal, made on March 3, is subject to appeal for one month.

The group says it will review the court’s judgement and explore all its available options, including an appeal, before deciding on the next course of action.

“Judicial commissioner accepted Chesham’s argument that it would not be just and equitable to wind up the firms. There is an exit mechanism available to Perennial under the constitution of the firms which provides for one party to offer to sell its shares to the other at a fair value,” says Religare analyst Tata Goeyardi on the high court’s dismissal, in a separate note on Monday.

“In 2010, the firms behind Capitol Singapore had come together after winning the bid. The idea was to restore the buildings to their former glory, turning the development into a landmark and injecting new vibrancy into the City Hall area. The Capitol Building houses shops, restaurant and a part of it — together with Stamford House — is home to upcoming luxury hotel The Patina Capitol,” he continues.

Goeyardi further highlights that hotel has yet to open, even after being slated to be ready in 3Q15.

As at 1.15pm, shares of Perennial are trading flat at 86 Singapore cents. —

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