MPO secures financing for first redevelopment project
Rua da Penha now fully funded with US$13.5 million loan facility
Macau Property Opportunities Fund Limited today announces that it has entered into a credit facility arrangement for up to HK$105 million (c.US$13.5 million) with Banco Weng Hang S.A., one of the region’s leading local banks.
The credit facility, attractively priced at three-month HIBOR plus 1.65% per annum, will be used to finance the redevelopment of Rua da Penha - MPO's first residential redevelopment project in Macau - and to partially refinance the original cost of acquisition of the property.
The funding exercise is in the final documentation phase, with the first drawdown expected to be made no later than 22 September 2010. With the agreement of this loan facility - non-recourse to MPO and for a term of approximately two years to July 2012 - Rua da Penha is now considered fully funded.
The Company continues to adopt a highly measured cash management policy, retaining a strong and prudent balance sheet. As at 31 May 2010, the Company had a cash balance equivalent to approximately US$32.5 million. MPO’s current loan-to-value, inclusive of cash balances, equates to 23.76%. Following the full drawdown of this latest loan, this will increase to 27.68%.
David Hinde, Chairman of MPO said: "Successfully securing this competitively priced facility for the Company’s first redevelopment project is a testament to MPO’s strong relationships in the local financial community, and will enable the Manager to continue to effectively execute its investment and development strategy."
Further Details
Rua da Penha is a niche residential project positioned towards local Macau residents. Located in the UNESCO-designated "Historic Centre of Macao", the eight-storey apartment block with a unique architectural heritage will consist of about 40 units totalling 80,000 square feet.
The redevelopment programme for Rua da Penha commenced in March this year. The Company is now preparing for the marketing and public sales campaign expected to be launched later this year. The project’s estimated completion date is 2011.