TRINCITY Mall and its shopping center, Trincity Commercial Center Limited, are for sale.
The properties, gems of Home Construction Ltd (HCL), a subsidiary of CL Financial Limited (CLF), will go on the market after the local High Court has approved their sale.
Since 2017, the CLF has been in liquidation, managed by the international firm Grant Thornton.
In 2020, the liquidators indicated their intention to prepare the properties for sale.
In its ninth report to the Court, for the period of June 18 to December 22, 2021, and signed by David Holukoff, the liquidators noted that during this period they had received “external stakeholder approval for the sale”.
“The liquidators have applied to court for a sanction regarding the sale of Trincity Mall and/or Trincity Mall. The Court granted the requested order,” the report said.
The report says the liquidators attended bi-weekly meetings with HCL regarding the shopping center divestiture strategy and received draft sales documentation for review and consideration.
“The liquidators are currently in the process of reviewing the sales documents before moving to the marketing phase,” the report said.
CLF Group previously sold HCL’s Valpark and Atlantic Plaza shopping centers to generate cash flow for the conglomerate, which is in liquidation.
Once liquidation was announced, the sale of Trincity Mall, and eventually Long Circular Mall, was inevitable.
However, the Covid-19 pandemic affected the pace at which the sale took place.
In 2020, in its sixth report to the High Court, dated June 15, 2020, the liquidators had noted that the closure of all non-essential tenants in the two shopping centers had negatively affected HCL.
“As two of the largest revenue-generating assets within the Home Construction Ltd sub-group, the immediate closure of tenants has had a significant impact on the sub-group’s ability to recover rent from its tenants. Although identified as non-essential for the purposes of the stay-at-home order, these are key business activities within the group, which contribute significantly to profit and cash generation; their closure had a significant impact on the group’s cash position and posed a tangible threat to HCL’s overall solvency,” the report said.
In their latest report, the liquidators note that the pandemic has had a significant impact on the company and its subsidiaries and affected its ability to achieve its objectives.
Regarding malls, the JLs noted:
“The imposition of the state of emergency and Covid-19 related restrictions again resulted in the closure of outlets in Trinidad and Tobago. HCL actively supported its tenants throughout the period with a comprehensive rent relief package and an enhanced health and safety measures program (including fogging and increased cleaning) Senior management sought a balance between providing essential tenant support and ensuring longer-term sustainable financial outcome for shopping centres. The lifting of restrictions and the reopening of shopping centers allows for a more optimistic view of the future and management is working with tenants to gradually reduce concessions and return to perception payment of rents while negotiating the reduction of accumulated arrears.
The liquidators failed to generate enough interest in the sale of the HCL land.
HCL had often boasted of having the largest land reserve in the country.
The sale of the land will be done in three tranches.
In 2020, after court clearance, HCL’s first slice of land, 3,000 acres, was put on the market.
The process, he said, ultimately generated substantial public interest, with 73 bids received.
Of this amount, six sale and purchase agreements were signed for TT$43.1 million.
The remaining two sales were to be completed by August 1, 2021.
However, in its ninth report, the liquidators said the two outstanding sale agreements are expected to be completed by the end of 2021.
“There was extensive correspondence and a number of meetings with the other bidders to expedite the completion of property sales. During the period, several extensions were granted to these bidders,” the report said.
Since court approval, 11 “Lands Acquirable for Public Purposes” notices, representing 1,455 acres, have been filed in the Trinidad and Tobago Gazette against land owned by the subgroup. HCL.
Consequently, the 11 lots will be subject to a compulsory acquisition procedure by the government.
“On February 8, 2021, HCL submitted to GORTT its understanding of the value of land to be acquired with recent appraisals. Although considerable time has passed, the liquidators are still awaiting GORTT’s response to begin the negotiation process. The liquidators have made written representations to GORTT regarding the delays due to the lack of progress on the part of GORTT,” the report states.
The liquidators noted that during the period under review, the draft investigation plan for the second tranche was finalized.
This, according to the report, resulted in 16 batches with updated investigations,
“The tranche two sale process began on August 16, 2021 and the submission deadline was December 3, 2021. The process resulted in the signing of 67 non-disclosure agreements, but only 14 bids were received, a significant drop in interest compared to the first tranche. The liquidators are currently evaluating these offers and will shortly notify successful bidders that their offers have been accepted,” the report said.
The report noted that the liquidators, HCL and HCL’s secured creditor, First Citizens (a direct creditor in the liquidation) are working closely and constructively to ensure that the proceeds of these sales are used in a way which both provides FCB with the security it needs with respect to the money it is owed and to ensure that HCL continues to have liquidity to continue operations during the pandemic.
He observed that HCL management arranged for updated survey plans for the remaining properties to be marketed in the third tranche of the land bank as “the liquidators have identified that certain plans held by HCL were inaccurate. “.
“The liquidators will have discussions with management and the designated brokers to determine if any modification is necessary to the sale process for tranche three,” the report said.
Continued divestment of HCL
Other HCL companies to be divested:
1. Safeguard Services Limited: The report notes that the sale was sanctioned in January 2021. To that end, the JLs engaged professional services firm EY to facilitate the sale. “EY has prepared an analysis of the likely outcome and it has been determined that the form of the sale should be driven by interest so that offers are accepted for SSL shares or assets and the best outcome is assessed after the receipt of all offers. The go-to-market documentation has been finalized and the advertising plan has now been budgeted and agreed upon. Assuming appropriate market interest, a sale of the company or assets is expected to close in the second quarter of 2022,” the report states.
2. Agostini shares: The report notes that the liquidators have been authorized by court order to oversee the sale of Agostini shares of HCL. As of June 18, 2021, the JLs had overseen the sale of 2,348,617 shares, or approximately 67% of HCL’s stake in Agostini Limited. “As of the date of this report, sales for the remaining balance of 1,141,413 shares have been agreed resulting in additional net proceeds of TT$27,729,813 in HCL,” the report states.
3. Motor Mall and San Fernando Lands: The report says the sales are due to close on December 23, 2021 and February 9, 2022, respectively.