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Oxley Holdings has terminated a letter of intent (LOI) to sell its Mercure and Novotel hotels at Stevens Road to Gracious Land for $950 million.
This comes after Gracious Land failed to make the subsequent deposit of $38 million “in accordance with the terms of the LOI or on such other dates it was due”, revealed the property developer in an SGX filing on Tuesday (19 Mar).
Under the terms of the LOI announced in January, the purchaser “shall pay a sum of $38.0 million (being four percent of the consideration) on 28 February 2019, and an additional sum of $47.5 million (being five percent of the consideration) on the signing date of the definitive sale and purchase agreement or 15 April 2019, whichever is earlier”.
Following the buyer’s failure to pay the deposit, Oxley notified Gracious Land that the LOI was being terminated with immediate effect on account of “material and/or repudiatory breach of the LOI”.
With this, Gracious Land provided a notice for a refund of the $9.5 million initial deposit.
Oxley, however, noted that such a deposit is non-refundable except upon the occurrence of certain events provided under the LOI and that it reserves the rights to take all necessary steps to protect its interest.
It added that the group will continue to “explore opportunities in respect of the hotels and/or the property and the company will make the relevant update announcements in compliance with the Listing Manual of the Singapore Exchange Securities Trading Limited to inform shareholders of any updates or developments in due course”.
It also advised shareholders and investors “to exercise caution when dealing in the shares of the company”.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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