Grande Asset's Bt12-bn bonds
Cash-strapped Grande Asset Development will place secured floating debentures worth up to Bt12 billion with Lehman Brothers Commercial Corporation Asia, a firm associated with its major shareholder, to move ahead with its resort and residential projects.
Thanathip Vidhayasirinum, managing director of Sage Capital, Grande Asset's financial adviser, said yesterday that with the political uncertainty, economic slowdown and delay in construction projects, Grande Asset's internal cash flow had dried up to the point where it can no longer work on its eight projects and redeem its debts. Grande Asset faces a shortfall of Bt7.51 billion to finish its projects and also Bt981.16 million in debt falling due in the coming year, he said. The short-term debt obligation does not take into account a Bt1.34-billion loan maturing in December that would not be refinanced. "With the current situation, financial institutions have tightened loan scrutiny and it is more difficult to tap funding sources," Thanathip said. "We tried in vain to secure a loan from local or overseas financial institutions. So Lehman Brothers Commercial Corporation Asia's financial support is a godsend as it can increase Grande Asset's ability to expand in the future and project a good image to consumers and investors." However, the debentures will increase Grande Asset's leverage and interest expenses, he said. In case of default, the company might lose all its projects except the Hua Hin Blue Lagoon Resort and Bangkok's Trendy Condominium, which were recently mortgaged to financial institutions. Giant Mauritius Holdings, owned by US-based investment banking giant Lehman Brothers, and Hotel & Property Development, a Thai company, last year acquired 43.23 per cent of Grande Asset. Siriporn Chanjindamanee The Nation
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