Walton International in creditor protection

Calgary-based property developer granted protection by Canadian court last month to resolve its debt problems

TORONTO • Real estate investment and development firm Walton International Group and its 32 affiliates filed for creditor protection in a Canadian court last month after blaming two recessions for their financial turmoil.

The developer, which buys land in the path of anticipated growth and sells it at a profit, was involved in real estate projects spanning 42,500ha in North America, and had US$253 million (S$355 million) in liabilities, media reports said.

A Canadian court granted creditor protection in the last week of last month, giving time to Walton International and its affiliates to restructure under the Companies' Creditors Arrangement Act, the Financial Post reported earlier this week.

The applicants are part of Calgary-based Walton Group, which comprises hundreds of trusts, corporations and partnerships in Canada, the United States and Germany, the Post reported, quoting documents filed by monitor Ernst & Young.

Nine of Walton International's projects have been caught up in its financial difficulties and are part of the restructuring process, including two Calgary industrial parks and four residential neighbourhoods in Edmonton, capital of Canada's Alberta province, the Calgary Herald reported.

  • Singapore entities 'not affected'

  • Calgary-based property developer Walton International Group's entities in the United States and Asia are not affected by the creditor protection and restructuring plan under the Companies' Creditors Arrangement Act (CCAA).

    Out of more than 600 enatities within the Walton Group of Companies, only 33 Canadian entities related to eight development projects in Alberta have entered the CCAA proceeding, it said yesterday.

    "The CCAA entities have no direct relation to pre-development land projects owned by investors in Asia... The projects held by Asian investors (including Singapore investors) remain sound," it said in response to a Straits Times query.

    It added that Walton Singapore will continue to operate in the normal course of business as what is happening to Walton Canada will not affect the Singapore investors.

According to court documents, Walton Group was hit by the lingering effects of the 2008 recession, a decline in the US real estate market and a downturn in Canada's Alberta province after a commodity price crash.

As a result, Walton International lost US$67.3 million in the last three years.

Company chief executive William Doherty said the province's "depressed" economy led to weakened demand for real estate, lower property values and sales declines, according to court documents.

"These economic conditions have in turn created a tight credit market for real estate developers, making it relatively difficult to obtain financing extensions and new project financing," he said.

Sales volumes for the Walton Group's pre-development land investments fell from US$117 million in 2013 to nearly US$20 million last year, an 83 per cent drop.

The group has been slashing costs to control its losses, including cutting its workforce in North America from 469 people in 2013 to 96 as of late last month, the Herald reported.

Its Singapore entity Walton International Group (S) has been on the Monetary Authority of Singapore's (MAS) Investor Alert List since October 2015.

The list is a non-exhaustive index of unregulated entities that may have been wrongly perceived to be licensed or authorised by the MAS.

A version of this article appeared in the print edition of The Straits Times on May 06, 2017, with the headline 'Walton International in creditor protection'. Print Edition | Subscribe