Pace to sell B14.5 bil­lion in as­sets

The Myanmar Times - Weekend - - International Business -

IN the lat­est ef­fort to tackle its mas­sive debt, em­bat­tled Pace De­vel­op­ment Cor­po­ra­tion Plc plans to raise funds through re­cap­i­tal­i­sa­tion and the sale of two res­i­den­tial projects whose ac­qui­si­tion value could be 14.5 bil­lion baht.

“Our plan is to fo­cus on short­term re­duc­tions in debt and in­ter­est [pay­ments], and we will achieve this by sell­ing some ex­ist­ing as­sets, re­al­is­ing rev­enue im­me­di­ately, as well as in­creas­ing the com­pany’s cap­i­tal through the rights of­fer­ing to ex­ist­ing share­hold­ers,” said Pace De­vel­op­ment chief ex­ec­u­tive So­rapoj Techakraisri. “These two ma­jor steps will en­able the com­pany to re­duce the debt-to-eq­uity ra­tio to 1.5.”

Pace De­vel­op­ment has en­tered into a mem­o­ran­dum of un­der­stand­ing (MOU) for the sale of the en­tire Nim­itr Lang­suan de­vel­op­ment, as well as the re­main­ing un­sold units, plus 25% of the to­tal units at The Ritz-carlton Res­i­dences Bangkok in the Ma­hanakhon build­ing, to San­siri Plc, which is now in the process of con­duct­ing due dili­gence.

If the terms of the MOU are ful­filled, the trans­ac­tion is ex­pected to be com­pleted in 2018.

Pace plans to use the in­come gen­er­ated to re­duce its debt with ma­jor cred­i­tors, the com­pany said in a re­lease.

“As one of Pace De­vel­op­ment’s fi­nan­cial sup­port­ers, Siam Com­mer­cial Bank agrees with the re­cap­i­tal­i­sa­tion plan, which will help up­lift Pace De­vel­op­ment’s fi­nan­cial sit­u­a­tion,” said SCB chief ex­ec­u­tive Arthid Nan­thaw­ith­aya. “The plan will help lower short-term fi­nan­cial obli­ga­tion and will strengthen the foun­da­tion for sus­tain­able growth in the fu­ture. SCB is pleased to sup­port and con­tinue to work with Pace De­vel­op­ment in the fore­see­able fu­ture.”

Re­cent re­ports said Set-listed de­vel­oper Singha Es­tate Plc was keen to take over projects owned by Pace, which was be­ing forced to re­pay loans to SCB.

Nat­tavuth Mathay­om­chan, Singha Es­tate’s chief res­i­den­tial de­vel­op­ment of­fi­cer, said the com­pany stud­ied all of Pace’s prop­erty projects, which were in the high-end seg­ment, and found the land bank was best suited to de­vel­op­ment.

Singha Es­tate, along with Set-listed San­siri Plc, had ex­pressed in­ter­est in buy­ing Pace’s projects af­ter Pace strug­gled with hefty fi­nan­cial li­a­bil­i­ties.

A source in bank­ing cir­cles said that the re­main­ing 53 units of the Ritz-carlton Res­i­dences Bangkok at Ma­hanakhon will be sold to San­siri if the deal goes through, a trans­ac­tion that could be worth 6.5 bil­lion baht, while the Nim­itr Lang­suan pur­chase could have a value of 8 bil­lion.

Pace has three other projects on hand, in­clud­ing The Ritz-carlton Res­i­dences Bangkok at Ma­hanakhon, which it re­ported in March as 75% sold, with 7 bil­lion baht pend­ing in rev­enue recog­ni­tion.

There is also the lux­ury villa re­sort Ma­hasamutr, worth 4 bil­lion baht, which was 30% sold, with 1.4 bil­lion baht await­ing rev­enue recog­ni­tion.

The lux­ury con­do­minium Nim­itr Lang­suan is worth 7.5 bil­lion baht and is sold out, but the project has yet to be­gin con­struc­tion.

As part of the re­cap­i­tal­i­sa­tion, Pace will of­fer 7.52 bil­lion newly is­sued shares to ex­ist­ing share­hold­ers at a price of 50 sa­tang each for 3.76 bil­lion baht.

The com­pany’s share­hold­ers will have a right to sub­scribe to two new shares for ev­ery one share held dur­ing Jan 9-15, 2018. – Bangkok Post

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