Published October 05, 2012

SC Global's resort deal falls through

It had plans to develop 2m sq ft seafront site into villa resort, hotel

By Mindy Tan

SC Global Development's recent bid to acquire an overseas resort hotel development has been unsuccessful.

The company has been engaged in discussions on "possible investment and equity participation in various overseas projects", especially in countries in South-east Asia, as well as some cities in Greater China, SC Global said in a statement released yesterday.

"The company continues to look out for opportunities to expand its overseas business and its regional diversification path. However, it should be noted that there is no certainty or assurance that the business expansion and diversification will result from such engagements or discussions taking place from time to time," it said.

The high-end residential property developer had previously said its wholly owned subsidiary, Tanah Investments, will pay US$32.5 million (S$40 million) for shares in two Singapore firms, which would give it indirect ownership of a resort development site in Bali.

It plans to develop the 2 million square feet seafront development site into a villa resort and hotel either for sale or to be operated by the company.

SC Global swung into the red in the second quarter ended June 30, recording a net loss of $21.7 million, compared with a net profit of $46.3 million in the year-ago period.

The loss was mainly attributed to an allowance for asset impairment of $65.1 million made by its subsidiary, AVJennings (AVJ), without which the company would have been profitable in Q2, said SC Global. Revenue for the quarter fell 53 per cent to $123.1 million.

For the fiscal first half, SC Global posted a net loss of $31.7 million, compared with a net profit of $119.1 million a year earlier. Revenue was $172.8 million, down 64 per cent from $483 million a year earlier.

SC Global shares hit a high of $1.285 following the announcement before ending yesterday down 6.5 cents, or 5 per cent, at $1.225.

The company requested a trading halt on Oct 3; the request was lifted following the announcement.