CHHB ... May 09

It is in talks with banks to refinance its RM150 million bonds by year-end (2009), as it prepares for future launches and landbank expansion.

Although the interest costs from servicing the bonds were “not very high”, CHHB saw the need to re-profile its debt to match its future cash flow. It needs to re-profile this RM150 million and work on growing its core business and bring in cash flow.

Rrefinancing is to match its future cash flow with its financing requirements.

The company did not plan to borrow heavily for the refinancing exercise despite CHHB’s low gearing of 0.5 times. It is in talks with a couple of banks to explore several options to refinance the bonds. The cash flow from CHHB’s properties alone will be enough to provide a significant part of that refinancing required.

CHHB sought the indulgence of the end beneficiaries of the bonds for the interest payment of RM16.23 million, due May 6, 2009, to be deferred until Dec 31, 2009. It would seek its bondholders’ consent to transfer properties equivalent to RM16.23 million in value in lieu of payment of interest.

CHHB deputy chairman and former managing director Tan Sri Lee Kim Yew was the only beneficial holder of the bonds. Lee owns a 32% stake in CHHB as at April this year (2009).

The RM150 million 3% to 8% redeemable secured bonds will mature on Dec 31, 2009. The bonds are secured by CHHB’s existing properties, including its Palace of The Golden Horses, which is valued at over RM400 million .The interest payments on the bonds are payable semi-annually in May and November. Since the bonds were issued on April 26, 1996, the company had paid interests totalling RM118.5 million.

CHHB would launch two projects, one residential and one commercial, when market conditions improved next year-end (2009).

For the year ended Dec 31, 2008, CHHB posted a net profit of RM13.6 million, down 86% from RM100.48 million in FY07. Revenue rose 9% to RM240.97 million.

Net cash from operations stood at RM40.2 million. It had RM347.71 million in total borrowings and RM685.79 million in shareholders’ fund.

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