Pace Development Corporation Plc has agreed to sell 2 residential projects to Sansiri as it looks to raise funds through recapitalisation and help repay outstanding loans to Siam Commercial Bank, reports local media. The sale of the projects is valued at THB14.5 billion
“Our plan is to focus on short-term 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. These two major steps will enable the company to reduce the debt-to-equity ratio to 1.5,” says Pace Development Chief Executive Sorapoj Techakraisri.
Pace Development entered into a memorandum of understanding (MoU) with rival developer Sansiri for the sale of the entire Nimit Langsuan development along with the remaining unsold units, plus 25% of the total units, at The Ritz-Carlton Residences Bangkok in the MahaNakhon building. According to sources, 53 units remain in the latter project which are estimated to be worth THB6.5 billion.
Sansiri is in the process of conducting due diligence and if the MoU terms are fulfilled, the deal will be completed sometime next year. Singha Estate Plc was also considering a move for the Pace residential developments and went as far as to study all of the company’s projects, but did not reach a deal. Pace needs the money to help it reduce the amount of debt it has with major creditors.
“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. 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,” says SCB Chief Executive Arthid Nanthawithaya.
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