Partnership between Capitol Singapore shareholders breaks down

The breakdown of a partnership between Capitol Singapore’s shareholders has led one of its shareholders, Perennial Real Estate, to apply for the holding companies to be wound up.

The three companies – Capitol Investment Holdings, Capitol Retail Management and Capitol Hotel Management – together hold the assets of Capitol Singapore, an integrated development located at the junction of Stamford Road and North Bridge Road. It includes a retail complex, a 157-room hotel, as well as luxury residences.

Perennial said on Thursday (Apr 14) that all components of the development have received their Temporary Occupation Permits.

Perennial, which is backed by Singaporean business magnate Kuok Khoon Hong, owns a 50 per cent stake in the three companies. The other 50 per cent stake is held by Chesham Properties, which is linked to Pontiac group, which owns the Ritz Carlton and Conrad hotels along with some other properties in the area.

In a statement to the media on Thursday, Perennial said its subsidiaries and Chesham have been unable to agree on a number of key issues in the Capitol Singapore project.

The shareholders and management of the three companies are in deadlock and “shareholders cannot realistically continue to work together constructively”, Perennial said.

The court application, filed through Perennial’s subsidiaries, aims to force a sale of the assets and allow one party to buy out the other. Perennial said it is prepared to buy the other 50 per cent stake in Capitol Singapore from Chesham, sell its stake to Chesham, or have all shares in the development be sold to a third party.

“The prevailing state of affairs is not conducive to the business interests of the Capitol project,” Perennial said in its statement. “It is therefore necessary for the shareholders to disengage from the joint enterprise, such that the Capitol project is ultimately fully controlled by either shareholder, or by a third party buyer.”

Responding to queries from Channel NewsAsia, Chesham said it regrets that Perennial has chosen to commence proceedings in court.

“We are reviewing the options and we will respond appropriately in the interests of the company,” the Chesham spokesperson said.

Source : Channel NewsAsia – 14 Apr 2016

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