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Breathing space for Allco in Singapore |
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By: Danny John smh.com.au 25 march, 2008
THE Singaporean real estate arm of the Allco Finance Group has pushed back a pressing deadline to repay $S550 million ($440 million) of debt that will relieve any demands on it for a swift sale of its recently expanded property portfolio.
Allco (Singapore), which manages the locally listed Allco Commercial Real Estate Investment Trust, hopes to complete the refinancing terms in the next few days after securing the backing of its lenders to extend the maturity date on the debt from the end of July to December next year.
The news helped spur Allco shares on Tuesday. The stock rode a broad market rally, jumping as much as 36%, or 7.5 cents, to 28.5 cents. The company remains the worst-performing among the top 200 in 2008, however, down almost 96%.
Wrapping up the new terms will be a significant move for Allco REIT which, like Allco's real estate offshoots in the US and Europe under the Rubicon name, have been facing deadlines to relieve debt and so avoid asset fire sales.
In a statement released to the Singapore Stock Exchange, on which Allco REIT listed two years ago, the trust and its manager said the next key step was to complete the paperwork with the bankers involved.
"The manager is reviewing the terms and conditions of the extension and will execute binding documentation as soon as practicable," the statement added.
However, the news was followed by an announcement from the credit ratings agency Moody's, which said it had downgraded Allco REIT from Ba1 to Ba2 as a result of the refinancing effort. It would also review the situation once the impact of the deal become clearer over the coming months.
The chief executive of Allco (Singapore), Nicholas McGrath, told the Herald yesterday that while he was always confident the refinancing would go ahead, he was nonetheless delighted it had been agreed on reasonable terms in light of the global credit crunch.
For more information: http://business.smh.com.au/breathing-space-for-allco-in-singapore/20080324-21ad.html
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