Construction firm Ley Choon Group Holdings is selling its Ley Choon Development subsidiary to TEE Land for $11.5 million as part of a debt restructuring agreement with its lenders.
The Ley Choon unit owns a 12,930 sq ft freehold site at 241 Pasir Panjang Road that it paid $13.23 million for in December 2012. The firm had intended to build a seven-unit cluster housing project, although none of the units had been sold. TEE Land said yesterday it will build a 24-unit, five-storey residential project on the site.
The debt restructuring agreement, which Ley Choon announced yesterday morning, stipulates among other things that the group is to dispose of non-core assets and utilise the proceeds to repay the lenders.
It completed the sale of its property at 4 Sungei Kadut Street 2 to Double-Trans for $6.8 million last month, and said that it was in the process of selling another property at 55 Kranji Crescent.
The agreement also states the group will repay the principal and interest owing to the lenders according to a cash sweep mechanism - where all operating cash flow is used for loan repayments.
Ley Choon is required to make a lump sum repayment for the total loan amount to the lenders on March 31, 2021, the final repayment date.
The group posted a net profit of $629,000 for the first quarter, reversing earlier quarters of losses. Its aggregate borrowings and debt securities payable within one year or on demand was $106.5 million as at June 30. Its units closed up 0.5 cents to 3.5 cents yesterday.