Hot stock: Oxley down 4.54% after terminating sale of Mercure and Novotel Hotels due to unpaid deposit

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HotStock: Oxley down 4.54% after terminating sale of Mercure and Novotel Hotels due to unpaid deposit

SHARES in property developer Oxley Holdings dropped 4.54 per cent on Wednesday as the counter opened for trading.

This comes on the back of news on Oxley's termination of a letter of intent to sell its Mercure and Novotel Hotels to Gracious Land Pte Ltd for S$950 million with immediate effect, as a subsequent deposit of S$38 million was not made by the buyer. As at 9.30am on Wednesday, the counter was trading at 31.5 Singapore cents apiece, down 4.54 per cent, or 1.5 cents. Some 3.2 million shares exchanged hands, as the Oxley counter remained active on the Singapore bourse in early morning trade.

In a regulatory filing late on Tuesday night, Oxley said that among other things, the subsequent deposit, being 4 per cent of the total consideration, was not made by Gracious Land.According to the terms of the LOI first announced in January, Gracious Land was supposed to pay the S$38 million on Feb 28 and a further sum of S$47.5 million on the signing date of the definitive sale and purchase agreement or April 15, whichever is earlier.

The group added that it will continue to explore opportunities with regard to the hotels, and will inform shareholders of any updates in due course., Oxley Holdings' executive chairman and chief executive officer Ching Chiat Kwong expressed confidence that the property developer can pay off its S$1.6 billion in debt due in the next three years. This is through the sale of its completed projects, local and overseas, as well as a steady stream of asset disposals.

 

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