CDL open to raising South Beach stake

http://www.businesstimes.com.sg/sub/...51940,00.html?

Published November 27, 2009

CDL studies fallout of Dubai World move on South Beach

By KALPANA RASHIWALA


(SINGAPORE) City Developments Ltd (CDL) is studying news of a restructuring of Dubai World, which is a partner in a CDL-led consortium that will develop the landmark South Beach site in Singapore.

'This is a new development and we will study this matter, in consultation with our other partners. If necessary, we will respond again in due course,' a CDL spokeswoman said yesterday evening.

Construction of the 99-year leasehold project - which will have offices, luxury hotels, retail space and residences - has been delayed.

The Government of Dubai has announced its intention to restructure the emirate's biggest corporate debtor. Dubai World would ask all providers of financing to itself and its affiliate Nakheel to 'stand still' and extend maturities of the debt until at least May 30, 2010.

In 2007, CDL, Dubai World and El-Ad Group teamed up to buy the South Beach site for $1.69 billion at a Singapore government tender. In November last year, CDL announced a deferment of the project's construction until construction costs eased.

CDL executive chairman Kwek Leng Beng said in August this year that construction is likely to begin around Q3 2010 with CDL and a new investor, Hong Kong developer Nan Fung, probably the ones that will pump in further money.

El-Ad and Dubai World are likely to be passive investors who may then see their share in the project diluted.

Nan Fung came into the picture in June this year when it subscribed for $205 million of five-year secured convertible notes under a refinancing exercise for a loan on the 3.5-hectare site. CDL also subscribed for the remaining $195 million of the notes.

The consortium refinanced an earlier $1.2 billion loan that matured in June this year by a combination of an $800 million two-year secured bank loan and the $400 million convertible notes.

In 2007, CDL subsidiary City e-Solutions inked a joint venture with Dubai World unit Istithmar to set up a chain of 30 budget hotels across South-east Asia over three years.

The US$50 million joint venture also included Tune Hotels.Com, which was to have developed and operated the hotels. Tune Hotels.Com is owned by the founders of the AirAsia budget airline.

City e-Solutions has since exited the joint venture.

Dun worry, I have faith in my old friend Kwek:)

Quote:

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Originally Posted by Property_Owner

Dun worry, I have faith in my old friend Kwek:)

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Wow :scared-4: ... you must be a really big shot !!! Can rub shoulders with Kwek ...

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City Developments: No Impact On Singapore Project From Dubai World
Sam Holmes and P.R. Venkat
Dow Jones Newswires
Singapore
Monday, 30 November 2009, 18.55

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South Beach

Property developer City Developments Ltd. (CDL) Monday said that it doesn't expect any impact on the planned South Beach project in Singapore from the debt problems of Dubai World Ltd.

"In June this year, as announced, we had already secured fresh funds via a combination of a S$800 million bank loan for a 2-year term and S$400 million in secured convertible notes ... We are presently refining the design plans and value engineering to ensure that this development is made more efficient, and to ensure that it is an extraordinary and innovative project," City Developments said in a statement.

City Developments along with Dubai World and U.S.-based El-Ad Group had established a joint venture, called South Beach Consortium Pte Ltd., in 2007 for South Beach, a property development in central Singapore.

The project will be completed by 2016.

On Wednesday, the Dubai government announced that it will seek a 6-month payment freeze on debts of one its biggest conglomerates Dubai World, which owns real estate developer Nakheel and is estimated to have liabilities of around US$60 billion.

The news spooked markets globally amid concerns over exposure by lenders.

Dubai World currently holds a one-third share in the Singapore joint venture.

City Developments said that in future, should there be a need to invest additional funds, the shareholders are expected to be called upon to put in their shares.

"A shareholder may be diluted if it does not fulfill its obligations to fund the joint venture company. The joint venture company may also choose to issue further notes if more funds are required in due course and it is open to any note holder and/or shareholder to subscribe for the notes," the statement said.

It said that it was too premature to say what its partners intend to do, but said that it is open to increasing its stake in the Singapore property project.

"As South Beach is an iconic development and one which has excellent potential, should there be an opportunity to raise our stake in the South Beach project, we are certainly open to explore," the statement said.

City Developments shares took a hit Monday on the Singapore Exchange (SGX) on news of the debt problems at Dubai World. City Developments closed 1.4% lower at S$10.00. By comparison, the Straits Times Index (STI) lost 1.1% to finish at 2732.12 points.

http://www.businesstimes.com.sg/sub/...61781,00.html?

Published December 1, 2009

CDL open to raising South Beach stake

By KALPANA RASHIWALA


(SINGAPORE) City Developments Ltd (CDL) says it is open to exploring the possibility to raise its stake in the South Beach project - in which Dubai World also has a share - if such an opportunity arises.

'South Beach is an iconic development and one which has excellent potential,' a CDL spokesperson noted.

She added that the joint venture company that owns the South Beach site may also choose to issue further notes if more funds are required in due course and it is open to any note holder and/or shareholder to subscribe for the notes.

CDL bought the South Beach site in 2007 jointly with Dubai World and El-Ad Group for $1.69 billion. In June this year, the JV company refinanced an earlier $1.2 billion land loan through an $800 million two-year secured bank loan and $400 million five-year secured convertible notes. Hong Kong's Nan Fung group subscribed for $205 million of the notes while CDL mopped up the remaining $195 million.

Dubai World is now asking all providers of financing to itself and its unit Nakheel to 'standstill' and extend debt maturities until at least May 30, 2010.

South Beach will have offices, hotels, residences and and retail space. Some market watchers suggest that in addition to the options outlined by CDL yesterday, another avenue for the JV company to fund the site's development would be to sell all or part of the project. If the apartments are launched and sold, sales proceeds would help to fund part of the development's construction. The hotels could also be divested to CDL's hotel units Millennium & Copthorne Hotels plc and CDL Hospitality Trusts, or a third-party buyer. Alternatively, the entire development, when completed, could be spun off into a real estate investment trust. Rough calculations show that Dubai World and El-Ad would have pumped in about $200 million each of equity in the project. As at Sept 30, 2009, CDL had cash and cash equivalents of about $979.5 million at group level. Market watchers reckon the South Beach consortium partners may have received offers for their stakes from potential buyers.

CDL said in August that South Beach's construction is likely to begin around Q3 2010, with CDL and Nan Fung probably the ones that will pump in further money. El-Ad and Dubai World are likely to be passive investors who may see their share in the project diluted.