GuocoLand seeks $1b loan for en bloc buy

Published July 5, 2007

GuocoLand seeks $1b loan for en bloc buy

It's asked banks for proposals to fund Leedon purchase


GUOCOLAND Ltd may borrow as much as $1 billion, a record loan for the Singapore-based developer as rising demand for homes boosts prices in the city-state, bankers said.

GuocoLand asked banks in Singapore to submit proposals for the loan to fund the purchase of a condominium development close to the city's downtown, three bankers said, asking not to be identified before the company makes an announcement.

The developer, controlled by Malaysian billionaire Quek Leng Chan, said in April it's buying Leedon Heights from the existing owners for S$835 million. GuocoLand is raising a record amount of funds this year as the company expands in Singapore and China, where economic growth is fueling demand for new homes.

'It is not difficult getting funds from financial institutions in today's environment where there is a lot of liquidity,' said Wallace Chu, analyst at DBS Vickers Research. 'Banks are willing to lend to companies as long as they have a good story to tell.'

Loh Hui Yin, GuocoLand's spokeswoman in Singapore, declined to comment on the loan.

GuocoLand raised $690 million in April selling bonds convertible into its shares, its biggest debt offering. It's also planning a rights issue of about $555 million.

Rising property prices have led to a surge in demand for land. GuocoLand and other developers are tearing down older apartments at a record pace to rebuild newer projects that are expected to fetch higher prices.

Singapore home prices rose 7.9 per cent in the second quarter from the previous three months, the fastest pace in almost eight years, according to the Urban Redevelopment Authority. In comparison, China's average housing price in 70 major cities rose 6.4 per cent in May from a year earlier, the biggest gain in 18 months, the National Development and Reform Commission said in June.

GuocoLand borrowed $100 million from banks in February, Bloomberg data show. The loan, its biggest then, was arranged by Sumitomo Mitsui Banking Corp. The loan GuocoLand is now seeking will more than double its long-term borrowings, which increased to $786.5 million as of June 2006, from $567 million a year earlier.

In the past 12 months, GuocoLand bought an apartment complex, known as Palm Beach Garden, in the eastern part of Singapore for $75 million and Sophia Court, a condominium in the downtown area, for $230 million, according to the company's website.

In China, it bought a 90 per cent stake this year in Beijing Cheng Jian Dong Hua Real Estate Development Co Ltd for US$750 million. The Chinese company owns the development and land use rights to the Dongzhimen site, a 106,000 sq m land parcel in Beijing. - Bloomberg

Friday, July 6, 2007

Guocoland files plan to offer shares


Guocoland, a Singapore-listed property developer, yesterday filed a plan to offer 221.9 million shares in a rights issue to raise about $555 million.

Through the offering, Guocoland shareholders will have an option to purchase one new share at a cost of $2.50 each for every three shares currently held, according to the offer information statement filed with the central bank.

The company had announced a plan for the rights offer in April.

Guocoland said it will use the proceeds from the rights issue to fund acquisitions in Singapore, Vietnam and China, including the proposed conditional acquisition of an interest in a Beijing land site.

The company, controlled by Malaysian billionaire Quek Leng Chan, is reportedly looking into borrowing as much as $1 billion to fund the purchase of a condominium site close to Singapore's downtown area.

A spokesman wasn't immediately available to comment on the report.

In April, the company said it sold $690 million in five-year convertible bonds.

The bonds were issued on May 7 and remain outstanding. — Dow Jones