PROPERTY developers Emerging Towns & Cities Singapore (ETC) and Hong Lai Huat Group have sounded profit warnings for FY 2020 ended December last year, saying they expect to report losses for the full fiscal year.

 

ETC attributed the upcoming loss to a combination of the recognition of fair value losses on its investment properties at its Golden City project which are non-cash in nature, as well as lower revenue recognised for the sales property units in the same project.

 

Meanwhile, Hong Lai Huat said the net loss for FY 2020 is due primarily to a decline in revenue resulting from the adverse impact of the Covid-19 pandemic

 

Both companies said they are still in the process of finalising results for FY 2020, and that these profit guidances are based on preliminary reviews of the their unaudited financial results.

HONG Lai Huat has announced a change in the intended use of the proceeds from its proposed renounceable non-underwritten rights issue unveiled earlier this month.

 

The change applies to the maximum subscription scenario, which would result in net proceeds of about S$26.3 million from the rights issue - after deducting some S$600,000 in expenses.

 

Some 54.8 per cent of the net proceeds, or S$14.41 million, will now go towards the repayment of outstanding debt to Hong Lai Huat' s group chief executive, Ong Bee Huat. (He has given an irrevocable undertaking to subscribe for his pro rata entitlement as well as excess rights shares.)

 

This S$14.4 million will come from three sources, including re-allocating the part of the rights issue proceeds originally allocated for the repayment of bank borrowings.

 

In a regulatory filing with the Singapore Exchange on Sunday, Hong Lai Huat said that following a review of the repayment terms and interest rates of the group' s existing bank borrowings, the board has determined that the group' s internal resources are sufficient for the repayment of the bank borrowings as and when they fall due.

 

Also re-allocated towards the repayment of outstanding debt to Mr Ong are a portion of the proceeds originally allocated to the project development cost for the group' s ongoing second mixed-use project, Royal Platinum, in Toul Kork in Phnom Penh and to new project land and development costs for the group' s third mixed-use development, also in Toul Kork.

HONG Lai Huat Group is proposing to undertake a renounceable non-underwritten rights issue to raise up to S$26.9 million to partly finance its second mixed-use development project in Phnom Penh.

 

It proposes to issue up to 295.91 million new ordinary shares on the basis of four rights shares for every three existing ordinary shares held by shareholders at an issue price of S$0.091 per rights share.

 

The issue price represents a discount of 36.4 per cent to the last transacted price of the shares on Dec 3.

 

It also represents a 19.7 per cent discount to the theoretical ex-rights price of S$0.113 per share.

 

In a minimum subscription scenario, the gross proceeds from the rights issue will be S$14.4 million, assuming that none of the entitled shareholders subscribe for their pro rata entitlements of rights shares and group chief executive Ong Bee Huat - who has given an irrevocable undertaking - subscribes for his pro rata entitlement as well as excess rights shares. In the maximum subscription scenario, the gross proceeds total S$26.9 million.

 

MAINBOARD-LISTED property developer Hong Lai Huat Group has engaged independent valuers to assess its properties held for sale, the board said on Thursday, in a reply to bourse queries on fair-value calculations in its recent half-year results.

 

The Singapore Exchange (SGX) had asked about the basis of assessment for the value of about S$25.2 million for these properties, as well as whether any material change would be needed, given the ongoing Covid-19 situation.

 

The SGX also asked for details of roughly S$5.89 million in " biological assets" , which Hong Lai Huat said referred to immature cassava that has not yet been harvested.

 

The board added that it believes the methodologies to determine the carrying value of both the properties held for sale and the biological assets are satisfactorily reasonable.

A WHOLLY-OWNED subsidiary of real estate and agriculture firm Hong Lai Huat Group on Friday entered into an agreement with Lao Channara to acquire a plot of land in Phnom Penh for mixed-use property development for a purchase price of US$22.5 million.

 

The mainboard-listed company said in a bourse filing on Saturday that the subsidiary, Public Housing Development (Cambodia), acquired the 1.2-hectare freehold land plot, located in Toul Kork district in the Cambodian capital.

 

The transaction is part of the group' s continued efforts to look for development opportunities around the region, Hong Lai Huat said.

 

The purchase price for the land was agreed on after taking into account the location and development prospects of the property, among other factors, it added.

 

Hong Lai Huat will finance the transaction by internal funds and bank borrowings, it said. The transaction is not expected to have any material impact on the group' s net tangible assets or earnings per share for the financial year ending Dec 31, 2020.

 

The agreement will complete within 180 days from Sept 11, it added.