Cambodia March 2021 | Restructuring Update
Greetings from the New Nordic Restructuring Team.
Like many companies, New Nordic Group has suffered immense challenges brought on by the COVID-19 pandemic and the lasting effects the global slowdown has had. In every destination where we have undertaken a project, it has been necessary to closely evaluate the business model to decide if it is sustainable moving forward. Each country or destination is a unique case and we have to anticipate the varied market conditions for the future.
Many clients have inquired if the project in Sihanoukville is affected by the petition for rehabilitation lodged in the Central Bankruptcy Court in Thailand which was announced by New Nordic Development Co., Ltd and covered in various media. The answer is no, the project Cambodia is owned by a separate legal entity and is not related to the legal process going on in Thailand.
Construction was abruptly halted on the project in April 2020 after our project management staff were stranded in Thailand with no way to return to the project and various lockdowns or restrictions were put in place. Since that time, the Company has diligently protected the project by maintaining security, maintenance, and periodic inspections by local engineers. It remains our primary objective to preserve the value of your investment and work toward the completion of the project as quickly as possible.
Our initial plans in Cambodia called for the development of several more projects in 2021 and beyond. For this reason, the Company had invested in various other assets in-country, such as land banks and hotels. Given the pandemic, it has become obvious that such plans will need to be abandoned for the foreseeable future and all resources must be dedicated to completing the Sunshine Hotel and Resort. We have been working tirelessly over the past several months to liquidate surplus assets at a fair value and use these funds to restart construction.
To reiterate, our priority is the completion of the project above all else, including the payment of ‘cash back’ obligations. As various resources fall into place, we are working in parallel with our contractors, engineers, and consultants to ensure the project can be completed on budget and as designed. While we cannot commit to the date construction will resume, we will be able to make further announcements in the coming weeks.
Furthermore, we are working on a proposal for a revised commercial scheme which will probably be in the form of a profit share model rather than a guaranteed return. This proposal will ensure the Company can sustainably provide income to owners for the future regardless of the ups and downs of the tourism market. We feel that the project will still offer considerable capital appreciation over the long term, improving the overall financial return to purchasers.
A few owners have inquired if the Company can buy back or otherwise cancel their contracts. Unfortunately, we cannot do this at this time as again, preserving capital for the completion of the project is paramount. In the future, we may be able to help owners who want to sell their units, however, we feel it is important to have the project completed to maximize the value for everyone.
This will be the first in a series of project-specific updates which the NNRT will send out to our clients and we hope you find the information useful.
We strive to be as transparent and factual as possible and are happy to receive your feedback at email@example.com
New Nordic Restructuring Team
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