Laguna National Club owes creditors S$69.7 million; assets far short of sums owed
HUNDREDS of noteholders and other creditors are owed S$69.7 million by Laguna National Golf and Country Club, which is currently in liquidation.
The club has only S$699,433.05 in estimated realisable assets, or 1 per cent of its debts, The Business Times has learnt.
On Tuesday (Jul 18), a creditors’ meeting was held to provide an update on the liquidation process and to appoint a committee of inspection to represent the interests of creditors.
Incorporated in 1991, Laguna was Singapore’s first proprietary golf club. Its first batch of members took up a S$120,000 unsecured note, which was due to mature on Jun 11, 2021. In addition, each of them paid membership fees, which ranged from S$40,000 for restricted individual members to S$180,000 for open corporate members.
The club was initially owned by a consortium including NatSteel and Resorts International, a subsidiary of DBS Land.
In 2001, motoring tycoon Peter Kwee acquired the club. One day before the notes were to be redeemed, Kwee wrote to the club’s trustees, British and Malayan Trustees, stating that the club was unable to fulfil the redemption due to its financial situation.
In February 2023, the High Court granted an application by Lim How Teck, a pioneer member of the club, to wind up the club, as there was no dispute that the company could not repay its debts. Justice Chua Lee Ming appointed Cameron Duncan and David Kim from corporate advisory and restructuring firm KordaMentha as the liquidators.
In financial statements seen by BT, about S$69.6 million is owed to Laguna Series A noteholders. Another S$10,239.90 is owed to British and Malayan Trustees, and yet another S$35,449.83 is owed to other creditors.
Related entities are owed S$54,823.95.
Related entities usually refer to companies that are subsidiaries or parent companies. They may also share the same owner. In 2016, Kwee had transferred Laguna’s land lease, which expires in 2040, to Laguna Hotel Holdings, another of his companies. A new club, Laguna National Golf Resort Club, is now operating on the same parcel of land.
Speaking to BT, Lim, a former chairman of Temasek-backed Heliconia Capital, said: “With all these interested-party transactions, the liquidators will have a lot of work to do to ascertain whether these payments were above board.”
He added: “They will have to look at the books very carefully over the past 20 years. We would like to be reassured that the money was well-spent, otherwise we will not be able to sleep at night.”
Another creditor, Lee Lian Hong, said: “The process has taken a bit longer than what we hoped for since February, but we hope that the liquidators can wrap up the investigation as soon as possible.”
No date has been set for a cash distribution to creditors. On Tuesday, Lim and Lee were appointed as members of a committee of inspection that will assist the liquidators in the performance of their duties and act on behalf of creditors when required.
When approached by BT, Kwee said he was a creditor as well, having made offers to hundreds of creditors to exchange their unsecured notes for new memberships with the new company, Laguna National Golf Resort Club.
He said he had moved the old company’s assets to the new company, in order to get refinancing and to build the Dusit Thani Laguna Singapore hotel. He added that building the hotel was part of the requirements to continue operating the golf course.
“Unfortunately, the old company has only hundreds of thousands of dollars, how can we repay?”
Asked whether any of Laguna National Golf Resort Club’s assets will go towards repaying the old company’s debts, Kwee said the club is a “totally new entity” and will continue operating.
