Bangkok Apartments | Bangkok Condos | Bangkok Serviced Apartments

Home

Raimon borrows B359m from Middle East investor

Bangkok Post Mar 26, 2009

The listed property developer Raimon Land Plc has borrowed 359 million baht from its Middle Eastern shareholder, IFA Hotels & Resorts Ltd, to overcome limitations in obtaining funding sources for its business operations.

IFA will receive a maximum annual interest of 10%, exclusive of the withholding tax that Raimon will pay. The short-term loan should be repaid by January 2010.

With the new loan the total size of connected transactions between Raimon and IFA Group within the past six months is 3.48% of Raimon's net tangible assets, posted as 2.82 billion baht last December.

Raimon is required to obtain shareholders' approval before entering into the transaction. The shareholders will meet on April 29.

The developer informed the Stock Exchange of Thailand that its board of directors felt the loan would afford the company sufficient funds for its real estate projects and working capital.

They said the interest cap at 10% per year was justified as no financial institution would grant such a significant loan without requiring some collateral in exchange.

Given Thailand's current economic and political conditions, the terms of IFA's financial assistance are considered to be more favourable than commercial banks' general loan terms, the board said.

ACL Securities has been appointed as the shareholders' independent financial adviser, with respect to the connected transactions and the preparation of relevant documents and other acts as required by law.

Raimon's board met on Tuesday to approve the non-payment of dividends, having earlier approved the payment of interim stock dividends.

Raimon shares closed yesterday on the Stock Exchange of Thailand at 20 satang, up two satang, in trade worth 6.2 million baht.