SINGAPORE - A group of subcontractors who 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 comes after the High Court approved a scheme last Wednesday (Nov 15) 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.
The scheme excludes its largest creditor, T4 main contractor Takenaka Corporation.
This is because Acesian Star disputes the Japanese firm's claims which, according to an SGX 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 Star said its works had not been in delay. Instead, its judicial managers are claiming more than $31 million against Takenaka for T4 works. They referred the disputes to arbitration in September.
T4, which cost about $985 million to build, opened on Oct 31.
Wednesday's court decision is the latest in a series of developments surrounding the dispute between Acesian Star and Takenaka Corporation, which smaller sub-contractors 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 company is now being run by its judicial managers, including from Deloitte & Touche, who pay off its debts as and when money becomes available.
Delays to creditors' payouts continued even as Acesian Partners, the sole shareholder of Acesian Star, earlier tendered $2.8 million for the proposed payout scheme. This money was to be held with the judicial managers until the scheme was approved.
During this time, Takenaka Corporation had applied to replace Acesian Star's judicial managers, or appoint an additional company, for clawback purposes, over a separate sum of about $8 million.
Its application was approved last month, allowing the addition of another judicial manager, with whom Takenaka Corporation will pursue its rights.
Wednesday's development, which Takenaka Corporation did not oppose, has led to creditors, including smaller sub-contractors, expressing relief.
According to an SGX announcement in August, a majority of creditors had voted in favour of the scheme, which will see them each getting a 25 per cent payout from Acesian Partners.
Some said they chose this option to "cut their losses" rather than continue to wait in uncertainty.
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 in vain for another two to three years for the alternative proposal of a "clawback" to retrieve the money from Acesian Star.
In April, four firms owed more than $5.2 million said they had not been able to start enforcement proceedings to recover the money as Acesian Star was in judicial management, causing serious cash flow problems.
One of them, See Ho, which specialises in air conditioning systems, expressed relief at the payout, which will amount to more than $760,000 for the company, senior manager Beh Chiu Hock told ST.
"This money is very important to smaller companies like us. If we did not have reserves from over 30 years of business, we may have had to stop operations," he said.
He expressed regret that the scheme was approved only months after most creditors had voted for it, adding that the wait has hurt smaller firms.
"We had over 200 staff about a year ago but now, have reduced headcount to about 70," he said.
He said the scheme's arrangement benefits smaller sub-contractors, as there has been no dispute for most of their debt.
Ms Yeak Ai Li, director of Yes Air-Cond Engrg, said one of her other companies had to stop operations due to a lack of funds during this period.
She expects to receive close to $19,000 now that the payout scheme has been approved.
"I'm relieved," she said. "At least, we didn't complete the works only to leave without a single cent."