25% payout for small firms owed for T4 works

Many of the creditors had voted in favour of the payout scheme, with some saying they did so to "cut their losses" for their work on Terminal 4.
Many of the creditors had voted in favour of the payout scheme, with some saying they did so to "cut their losses" for their work on Terminal 4.ST PHOTO: ARIFFIN JAMAR

High Court approves payment scheme for contractor's 75 creditors owed over $12m

A group of subcontractors which have been owed payment for their work on Changi Airport's Terminal 4 (T4) are set to receive a 25 per cent payout after waiting for more than a year, The Straits Times understands.

The latest development came after the High Court approved a payout scheme last Wednesday for contractor Acesian Star's 75 creditors. According to documents seen by ST, they are said to be owed more than $12 million in total.

T4, which cost about $985 million to build, opened on Oct 31.

The court decision brought relief to creditors, including smaller subcontractors.

Many of the creditors had voted in favour of the scheme in August, which will see them each getting 25 per cent of what they have been owed from Acesian Partners, the sole shareholder of Acesian Star.

Some said they chose this option to "cut their losses".

One of them is Pro-Flex Engineering, which supplies and installs electrical works. Its director Raymond Lim said in a July affidavit obtained by ST that it was owed around $816,500, and that he did not wish to wait any longer.

Another company relieved at the outcome is See Ho, which specialises in air-conditioning systems. It is set to get back more than $760,000.

Its senior manager Beh Chiu Hock said: "This money is very important to smaller companies like ours. If we did not have reserves from over 30 years of business, we might have had to stop operations."

On how the long wait has hurt his firm, he said: "We had more than 200 staff about a year ago, but now we have reduced headcount to about 70."

PAYOUT VITAL

This money is very important to smaller companies like ours. If we did not have reserves from over 30 years of business, we might have had to stop operations.

MR BEH CHIU HOCK, senior manager of See Ho, which is set to get back more than $760,000.

Ms Yeak Ai Li, director of Yes Air-Cond Engrg, said one of her other companies was forced to stop operations.

"I'm relieved," she said, adding that she expects a payout of close to $19,000. "At least, we didn't complete the works only to leave without getting a single cent."

The payout scheme excludes Acesian Star's largest creditor, T4's main contractor Takenaka Corporation. Acesian Star has disputed the Japanese firm's claims which - according to a Singapore Exchange announcement it made in May - stand at about $27 million. The sum includes claims for back charges and liquidated damages.

According to court documents obtained by ST, Acesian said its works had not been delayed.

Instead, its judicial managers are claiming more than $31 million against Takenaka for T4's works. They referred the disputes to arbitration in September.

Last week's court decision is the latest in a series of developments on the dispute between Acesian Star and Takenaka Corporation, which smaller subcontractors said had impacted them.

With Acesian Star in judicial management, some firms found themselves unable to start enforcement proceedings to recover the money they are owed. The judicial managers pay off its debts as and when money becomes available.

Delays to payouts continued even as Acesian Partners earlier tendered $2.8 million for the proposed scheme. This money was to be held with the judicial managers until the scheme was approved.

A version of this article appeared in the print edition of The Straits Times on November 21, 2017, with the headline '25% payout for small firms owed for T4 works'. Print Edition | Subscribe