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New Nordic Development – Monthly Newsletter 30 July 2021

Dear Client,

Greetings from the New Nordic Restructuring Team!

The global pandemic drags on, and we would again like to hope for our client’s health and safety during these challenging times.

Here in Thailand, we are experiencing record numbers of new cases increasing to new peaks every day, coupled with extreme pressure on an overwhelmed healthcare system. While we note with optimism the Phuket Sandbox scheme is entering its second month of operation, we also see dwindling numbers of new arrivals scheduled amid increased restrictions on Phuket due to local infections rising and concern about the availability of resources for both locals and tourists. The Samui Plus reopening has seen just 31 international arrivals to Koh Samui (with 2 to Koh Phangan and 1 to Koh Tao) and 110 people coming from the Phuket Sandbox. We closely follow all the government’s plans to restart tourism activities in the country and will incorporate these developments into our plans for reopening and completion of projects with updates to follow.

The growing risk of infection, along with severe controls over interprovincial movement of people and goods have understandably impacted our daily operations in Thailand. This week, sadly, we recorded the first case of COVID amongst our employees and most are now transitioning into Work from Home arrangements. Additionally, Thailand is under very strict restrictions on the movement of people across provincial borders, along with a nationwide curfew. Until the situation is brought under control, face-to-face meetings will not be possible, but we remain ready to assist by videoconference on request.

As you may know, our team is focused on the initial restructuring of New Nordic Development and a strategic plan for all related Companies. Many clients have sent inquiries as to our specific plans and actions that can move the Company forward. We would like to remind clients of the timeline and sequence of events that must be undertaken before we can address related company challenges.

At present, the Court has rescheduled the review of our rehabilitation petition from January 28 to September 22. The Court took this action due to an overwhelming number of such petitions, along with COVID restrictions back in May, when the hearing was initially scheduled. During this hearing, the Court will first decide to accept or reject the Company’s request to enter the rehabilitation process. The Court will make their decision based upon the most favorable outcome for creditors – either to allow the company to attempt to rehabilitate itself or for all assets sold and the company to be liquidated. There is no possibility of simply moving ahead with “business as usual”. In the event the Court finds the Company cannot or should not be rehabilitated, management of the Company and its assets will be turned over to the Office of Legal Execution and sold at auction.

For the Court to accept the rehabilitation petition, it must, provide a better outcome for creditors than liquidation. Any objection to the Company’s petition for rehabilitation will lead to the company being closed and being liquidated.

Secondly, the Court will appoint a Planner for the rehabilitation process. The Planner’s role is to develop and execute a strategy to return the Company to profitability within a maximum of five years and settle the debts of the company in an orderly manner. The Company would propose to renegotiate debts – as well as cashback and rental guarantee obligations – based on a revised, sustainable business model, considering current market conditions. Any proposal made by the planner would again require approval by creditors. Further, any deviation from the business plan would require Court approval before the Company could proceed. The transparency and fairness in this process is one reason why we chose to proceed with formal, court-supervised rehabilitation. All creditors are treated on an equal basis and are allowed to vote on whatever proposal is put forward.

We would like to reiterate that above all, rehabilitation must provide a better outcome than liquidation, otherwise, it will not be accepted by the Court.

Some clients have expressed concerns on the suitability and experience of existing Directors of New Nordic Development being put forward as the company’s planner. Based on this feedback, the Company has recruited and appointed Mr Donald McBain, a professional rehabilitation planner to oversee the rehabilitation process, appointing him as a non-Executive Director in June 2021. Mr McBain has led dozens of companies in Thailand through the rehabilitation process over a career spanning nearly three decades. We hope his role in the Company will give confidence to both the Court and our clients about our determination to achieving the best possible outcome for everyone. Mr. McBain introduced himself and provided more information about his background and expertise during our webinar which was held at the end of June.

Whilst we cannot formally put forward our final plan just yet, we have however developed five key principles needed for a resilient recovery of New Nordic Development and the entire group. We look forward to working with our professional advisors and our creditors to further develop our plans moving forward.

1.    Utilize Assets Creatively to Maximize Value
Our work has identified a detailed set of investments needed to restore profitability to New Nordic Development and other companies of the Group. Many are capital and labor-intensive, spread across several projects and will accelerate our returns.

To bring these investments forward, we must demonstrate new ways of deriving maximum revenue from our existing assets.
Overall, our plan will ensure that every building is utilized in a way that boosts returns and delivers value to stakeholders.

2.    Focus on Long Term Returns
Based on client feedback, we recognize that many buyers want to achieve long term passive income with their properties in Thailand. Given our expertise and experience in the market, our plan will focus on providing options for operating units with a longer ROI horizon, but with less volatility than directly competing in the hospitality industry.

3.    Diversify Revenue
Whilst we do expect tourism to recover in the future, we feel that some assets may produce higher returns repurposed as, among other things, long term serviced apartments, serviced offices, coworking spaces, meeting spaces, software incubators contract kitchens and support services for Companies locating with us, particularly in the Pattaya campus.

We have also been in contact with specialty hospitality providers – such as care for the aged, and substance abuse treatment – who have expressed interest in operating some of our assets for their clientele.

Overall, our plan will ensure that the Company’s revenue base is as broad as possible.

4.    Ensure Sustainability of our Plan and Mitigate Risk
Over the past several years, the tourism industry in Thailand has found itself far too dependent on certain demographics which due to any number of factors could dwindle or even disappear with very little notice.

Our plan will ensure that the Company’s future is sustainable, drawing revenue not only from the various repurposed buildings but also providing all the ancillary services necessary for the community to thrive.

5.    Strive for Capital Appreciation
We recognize the severe impact COVID has had on property values in Thailand in general, and Pattaya specifically. While the market will certainly take time to recover, we feel that a rejuvenated Pattaya campus and thriving tourism and business community in our ecosystem will ensure our clients have a reasonable path to exit their investments if they so desire. We will work toward providing as many options as possible for clients who wish to sell their leasehold or freehold ownership.

Finally, we have received a lot of positive feedback about the webinar which was recently held for New Nordic Development clients. We are planning a second such event at the end of August and will invite all clients in a separate message.

Thank you again for your ongoing support, patience and understanding.

New Nordic Restructuring Team



This portal aims to provide information from the New Nordic Group in Thailand regarding the ongoing rehabilitation being carried out under Section 90 of the Bankruptcy Act B.E. 2483 (1940 A.D.), as amended.  

The notices provided herein will be both official and unofficial announcements as well as various court filings.

The portal also provides general background on the Thai Bankruptcy Act.  Note that this is general information and DOES NOT CONSTITUTE LEGAL ADVICE.  By using this website, you hereby understand and accept the limitations of this portal. If you require further clarifications, you are advised to consult a professional.

By proceeding further, you confirm that you have read and agree to these conditions.