The LET Group's sale of Japanese properties has fallen through

Indra55

LET Group failed to sell a property in Japan as the buyer couldn't pay the balance, resulting in the forfeiture of a $5 million deposit. LET Group, formerly known as Sun City Group (1383), has been selling multiple properties and subsidiaries to repay debts. In April of this year, the group planned to sell an undeveloped project in Hokkaido, Japan, including a villa and hotel, for $27.6 million (approximately HKD 212 million). However, the sale encountered difficulties, and the buyer failed to pay the remaining amount by October 31. As per the contract terms, the paid $5 million deposit was confiscated.

The property in Hokkaido, located in the town of Yamauchi, Kutchan-cho, Abuta-gun, has a total land area of 220,000 square meters. The group intended to build over 50 villas, 20 row houses, and a hotel with more than 40 rooms on the property. However, the project was still in the preliminary planning stage, with no construction work initiated. The property's book value was HKD 170.6 million, and after the sale, the group expected a profit of HKD 35 million. The net proceeds of around HKD 205.6 million from the sale were intended for debt repayment and general operational and business development purposes.

The original buyer was an independent third party, Cheah Meng Fui, who had to make a cash payment. They paid a $1 million deposit on April 28. However, on July 31, the buyer changed hands, with the new buyer, Raymond Shao Leong Yap, taking over and paying a second deposit of $1.7 million. The revised terms on September 25 required the new buyer to complete the transaction by October 31. If not, it would be considered a breach of contract. The new buyer paid an additional deposit of $2.3 million on September 20, totaling $5 million. Unfortunately, the new buyer couldn't pay the remaining $22.6 million (approximately HKD 177 million) by the specified date, leading to the forfeiture of the mentioned deposit. The directors believe that terminating the transaction will not have a significant adverse impact on the group's financial condition and operations.

Iti9

They probably didn't have enough liquidity for turnover, so owing money is quite normal.

Jiten171

Why was it confiscated by others?

Kabir903

As long as they dare to confiscate it, there must be a legal basis.

Kapil334

The outstanding balance for this is still quite substantial.

Kitu11

This is something I can't quite understand.