14/09/2018 - 15:22

Devwest directors, Sincap dispute settled

14/09/2018 - 15:22

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Singapore company Sincap Group has announced a settlement of its long-running commercial dispute with three directors of Perth property developer Devwest Group.

Devwest commenced construction of an $85 million project at the South Perth property

Singapore company Sincap Group has announced a settlement of its long-running commercial dispute with three directors of Perth property developer Devwest Group.

The settlement is between Sincap and Chad Ferguson, Damon Ferguson and Tony Hatt and special purpose vehicle Richardson 1 Pty Ltd.

It requires the four local parties to pay $1.77 million by the end of this month and a further $2.3 million plus interest by the end of September 2020.

The dispute stems from a 2015 deal under which a Sincap subsidiary lent $4.7 million to Richardson 1 Pty Ltd, which owns a parcel of land at 1 Richardson Street in South Perth.

Devwest commenced construction of an $85 million project at the South Perth property, comprising a nine-storey office building and a 13-storey apartment tower.

However, the market downturn meant the project did not proceed to completion.

The Sincap loan came shortly after the group also agreed to purchase a property at 581 Murray Street in West Perth.

Sincap subsequently overhauled its board and returned its focus to mining, while also seeking repayment of its loan.

Sincap announced a settlement in September 2015, which involved the Australian parties repaying $1.95 million.

The deadline for further repayments was extended to September 2017, but the four local parties failed to meet that deadline.

Interest on the debt, at a rate of 17.5 per cent per annum, meant the principal kept on growing.

The settlement announced this month includes Sincap taking a third mortgage over the land at 1-3 Richardson Street.

Sincap also requires evidence that the settlement will be accepted by three current lenders to Richardson 1, namely Merricks Capital Pty Ltd, Walhamstow Pty Ltd and Hawkesbridge Property Holdings Pty Ltd.

Devwest executive director Chad Ferguson told Business News the group had been continuing to seek pre-sales for the Richardson Street project, and expected to start construction before the end of this year.

The group has been proceeding with other projects, including as development manager for the refit of the Telstra building in Stirling Street, which is to become a 500-bed student accommodation facility.

Mr Ferguson said the group also had development approval for an apartment project in Manning.

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