Yep yeokiwi,
Here's the article from BT today.
Business Times - 14 Oct 2010
Court clears TTI's debt plan with modifications
Ruling closes 2-year- long struggle for TTI, which drafted the scheme to stay afloat
By TEH SHI NING
(SINGAPORE) The Court of Appeal yesterday approved TT International's (TTI) debt-restructuring scheme, albeit with modifications.
OCBC Bank and Ho Lee Construction, the two dissenting creditors who took their fight to the highest court, also saw their concerns over the scheme's unfairness addressed in the changes made.
The court ordered that TTI pay all of OCBC's costs incurred in both the appeal and the earlier High Court proceedings, and half of Ho Lee's costs in both as well, adding that these are 'priority debts' not subject to the scheme.
Chief Justice Chan Sek Keong and Justices V K Rajah and Andrew Phang yesterday sanctioned the scheme, subject to changes to address the original's shortcomings.
'In particular, there is a lack of clarity to the milestones to be met in the implementation of the scheme and the methodology to be employed for assessing its ongoing viability,' the brief grounds of decision read.
To that end, the court appointed OCBC, Ho Lee and DBS Bank to the monitoring committee (MC) which oversees the scheme. They replaced three members, including TTI's wholly owned unit Akira Corporation.
It also gave the MC greater oversight. Every six months from Nov 1, scheme manager nTan Corporate Advisory will have to report to the MC on the company's ability to fulfil its scheme obligations.
Substantial transactions with related parties will also require the MC's approval, as will the company's budget, including operating expenses and professional fees.
Legitimate concerns have been voiced over the quantum of professional fees and expenses incurred by TTI in relation to the scheme, the court said. Some estimate that these amount to $23 million so far. All TTI's professional costs incurred after Aug 27, 2010 shall now be taxed by the High Court.
Other key disputes during the hearings, over adjudication of claims and voting classes, were also addressed. The modified scheme requires 50 per cent and 75 per cent in value of scheme creditors to approve of any procedural and substantive amendments respectively. Related creditors will vote in a separate class and their claims will rank after third-party creditors'.
The other changes addressed concerns over the rights of first refusal relating to redeemable convertible bonds, dilution shares and conversion shares.
This decision closes a two-year long struggle for TTI, which drafted the scheme in 2008 to stay afloat after racking up huge debts in the global financial crisis.
Executive director Julia Tong said TTI is 'thankful for the outcome' and will now 'embark on a new chapter of restructuring and growth to return value to all stakeholders'.
This could involve an offer from Boustead Singapore to inject $150 million and revive TTI's stalled Big Box development, one which hinged on the scheme being passed and expires tomorrow.
As at last week, whether the scheme had received the 75 per cent approval from creditors needed to go before the court for sanction, was still a matter of contention. But the court yesterday said Ho Lee did not comply with directions on how its claim for loss of profits ought to be calculated. The scheme manager thus acted correctly in disregarding Ho Lee's claim, and the scheme met the requisite threshold.
Still, Ho Lee's managing director Benjamin Tan yesterday said Ho Lee was happy with the decision. 'It was never our intention for the company to go under,' he said, adding that the changes 'allow the necessary checks and controls to be in place - key transparency issues which were previously sorely missing'.
OCBC said its position is vindicated in the court modifying the terms and awarding OCBC full costs of the appeal. 'Moving forward, OCBC will work with TTI to implement the modified terms of the Scheme in the collective interests of TTI and the Scheme Creditors,' said group corporate communications head Koh Ching Ching.
The wider impact of the ruling could come when the court issues its 'detailed reasons' in due course, as schemes of arrangements are frequently used in Singapore to restructure debt.
Senior Counsel Lee Eng Beng of Rajah and Tann, who represented OCBC, said: 'The basic statutory provision actually lacks detail in a lot of aspects. This case presented an opportunity for the Court of Appeal to lay down principles and guidelines which will be very useful for companies which may have to invoke a scheme of arrangement in future.'
