PACE Development Corporation has sold part of the MahaNakhon development to King Power in a deal worth THB14 billion. The agreement sees the duty-free shopping company pick up the observation deck in the MahaNakhon building as well as the remaining units in the Ritz Carlton Residences at MahaNakhon.
The developer will use the funds to help it reduce debts as well proceed with the construction of current residential developments. Funds will also be allocated to help PACE expand its Dean & Deluca brand across the globe. The PACE board of directors agreed to the transaction after deciding that it was in the company’s best interests.
PACE had agreed to sell the assets to Sansiri only for the rival developer to pull out of the proposed deal earlier this year. Other Thai developers had been rumoured to be interested in the assets, but never made a public offer known.
Sorapoj Techakraisri, Chief Executive Officer, PACE Development Corporation Plc (PACE)
In another move, PACE noted that it had agreed to buy back the shares in the MahaNakhon it sold to Goldman Sachs and Apollo Holdings last year. The 2 companies had invested a combined THB10 billion in the project, but no longer have any commitment to either Goldman Sachs or Apollo Holdings.
The decision to sell parts of assets in MahaNakhon is consistent with PACE’s previous business plan to put MahaNakhon into Real Estate Investment Trust (REIT) upon project completion, says Sorapoj Techakraisri, PACE Chief Executive Officer Development Corporation. By closing the transaction now, the company is able to recognising this revenue quicker and help it cut some of its debts.
In addition to the revenue from the sale of MahaNakhon assets, PACE will use THB3.8 billion it earned in revenue from capital increase shares in February for financial restructuring. The company believes this will strengthen its financial position, help it become more efficient and grow sustainably in the coming years.
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