Investors eye Poh Lian's top construction ratings

Investors eye Poh Lian's top construction ratings

Several potential investors have expressed interest in buying financially beleaguered Poh Lian Construction so they can get two of its crucial operating ratings.

The ratings issued by the Building and Construction Authority allow the firm to tender for certain lucrative contracts because of its track record.

One is an A1 grading in construction which lets it bid for public projects with no upper price limit.

It also has an A2 grading for civil engineering works, so it can tender for contracts of up to $85million in that category, according to a filing to the Singapore Exchange (SGX) by parent company United Fiber System on Tuesday.

The announcement stated: "The judicial managers considered a possible sale of (Poh Lian) with its ratings, without any liabilities which shall be hived off in a separate vehicle.

"The judicial managers, however, had not received any formal offers."

An affidavit filed with the High Court last week indicated that interested parties want more clarity on the extent of Poh Lian's liabilities and whether its construction ratings are transferable.

Last Friday, the High Court approved Poh Lian's request for a judicial management order.

That gave judicial managers Tam Chee Chong and Andrew Grimmett 60 days to present a resolution to Poh Lian's creditors.

The staff, including about 350 foreign workers, are also in a state of limbo.

The Straits Times understands that about a third of the workers will be transferred to some developers to work on stalled Poh Lian projects, while the rest are likely to be repatriated.

United Fiber System also listed nine projects Poh Lian was working on.

These included public and private properties, as well as upgrading works for a primary and secondary school.

Five of these contracts have been terminated - the Segar Grove Build-To-Order Housing Board project in Bukit Panjang, and private condominiums H20 Residences, Bishopsgate Residences, Goodwood Residence and Sophia Residence.

The judicial managers and HDB are working together to find a contractor to take over another project, the 741-unit Senja Gateway in Bukit Panjang.

Tuesday's SGX announcement also stated that three projects - St Anthony's Canossian Primary and Secondary schools and condominiums The Trillium and Meadows@Peirce are in what is called the defects liability period.

This refers to the one-year period when the developer is required to rectify any defects in the units.

Poh Lian has total debts of about $92.3 million, excluding contingent liabilities of $82 million, said United Fiber System in its statement.

It is also due $20.7 million in trade receivables and $27.7 million in retention sums held by developers.

rjscully@sph.com.sg


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