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Raimon says Lehman shares all paid up

Wednesday, 17 September 2008

source: Bangkok Post WEDS Sept 17 2008 The insolvency of Lehman Brothers will have no impact on the investments of the SET-listed developer Raimon Land Plc both now and in the future, says chief operating officer Kitti Tungsriwong. The US investment bank has a 25% stake in a joint-venture project with Raimon, The River, a luxury condominium on the bank of the Chao Phraya River in the Klong San area, in which Lehman invested through Lehman Brothers Bangkok Riverside Development Pte. ''[Lehman's] investment in The River has already been fully paid,'' Mr Kitti said yesterday. ''Besides, The River is now 55% sold.'' The 13.5-billion-baht River is 49% held by Raimon, 11% by Raimon subsidiary Contemporary Properties and 15% by the Dubai group Istithmar and Raimon's major shareholder IFA. For new investment, he said another Lehman subsidiary, Lehman Brothers Commercial Corporation Asia Ltd (LBCCA), is scheduled to exercise the right to buy a 25% stake in the Raimon subsidiary Raimon Park View, with payment due in December and January. Raimon Park View is the developer of the 185 Rajadamri luxury condominium worth 9.75 billion baht. The 200-unit project will be located on a four-rai site on Rajadamri Road where the Cambodian embassy was formerly situated. ''If Lehman refuses [to exercise the right], we will stand to gain as the option is for it to buy the stake at cost price. But now the project has gained a lot of interest from potential buyers registering with us. It could achieve higher selling prices,'' he added. Raimon plans to launch 185 Rajadamri in November 2008. It has put in 500-600 million baht in addition to loans borrowed from Bank of Ayudhya. Lehman held the right to buy the 25% stake as it helped finance 90% of the land cost for Raimon Park View. However, Raimon last month refinanced the 1.321-billion-baht loan it borrowed from Lehman with Bank of Ayudhya after the contract term expired. Lehman charged 9.5% interest for the loan while the Thai bank charges 8%, he said. ''Up to now Raimon and Lehman have not had any discussion about their existing joint venture project and new co-investment project,'' said Mr Kitti. Raimon shares closed yesterday on the Stock Exchange of Thailand at 0.57 baht, down one satang, in trade worth 1.91 million baht. They have lost 40% since the beginning of April.

 

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