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Raimon restructures as its market suffers

Bangkok Post Mar 4, 2009 CEO exits, foreign investment ebbing Raimon Land Plc, which announced a restructuring yesterday, has felt the impact of a heavy reliance on both foreign funds and customers in the global recession, says an industry executive. The company yesterday announced the resignation of executive director and CEO Nigel Cornick, effective on March 1. He also resigned from the board of Raimon and its associated companies. Hubert Viriot, a director and also an executive at Raimon's major shareholder IFA Hotels & Resorts, will be appointed as new chief executive. "Property developers that depend on foreign funds, investors and buyers will be exhausted this year due to the global recession," said the executive, who asked not to be named."There will be more foreign developers that need to have restructuring or will be forced to sell projects or land plots." The source said Raimon's property portfolio was more than 60-70% dependent on the foreign market which has largely withdrawn investments with the steep global credit slowdown. Its shareholders and investors - Middle East-based IFA and bankrupt Lehman Brothers respectively - have been hard hit since the US-financial meltdown began last September. Lehman held 25% in The River, Raimon's showcase upmarket condominium. "[Raimon's] vision is good and its products and locations are also good. But it's unfortunate that the current situation is worse," the source added. But another source said some overseas financial institutions were looking into the sales status of luxury condominiums they had advanced project loans to, which would include The River. The source said the financial institutions saw prices quoted by Thai developers of luxury condominiums as high given the trend in markets such as Hong Kong, where prices fell over 30% in the last quarter of 2008. He said Thai luxury residential unit prices dropped by about 15% in recent months. Raimon yesterday also announced a stock and cash dividend of 278.98 million baht to its shareholders. Each Raimon share will receive 0.0837 new shares and 0.0093 baht in a cash dividend to cover withholding tax payable by shareholders. Raimon informed the Stock Exchange of Thailand that it would increase its registered capital by 251.1 million baht to 3.06 billion baht through the issuing of new shares, at one-baht par, to allocate as stock dividends. Raimon reported consolidated revenue last year of 2.7 billion baht, up 59.8% from 1.69 billion in 2007. Its consolidated net profit was 145.78 million baht, compared with a loss of 30.43 million the year before. Raimon shares closed yesterday on the SET at 0.18 baht, up two satang, in total trade of 3.46 million baht.

 

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