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Friday, May 27, 2011

Tanco to resume property projects after settling debt

PUCHONG: Resort operator and developer Tanco Holdings Bhd plans to proceed with some of its property projects once it has paid its RM144.58mil debt to Lehman Brothers Commercial Corp Asia Ltd by the third quarter of 2012.

At an EGM on Tuesday, Tanco shareholders approved the ordinary resolution in relation to the proposed settlement scheme to Lehman Brothers.

Tanco group managing director Datuk Tan Jing Nam said the company's land was now locked up in the lengthy litigation process.

Tan says the company ’s land is now locked up in the litigation process.

The land bank includes 430 acres in Palm Springs Resort City, Port Dickson, and 170 acres in Duta Lakes, Lake Kenyir, Terengganu.

“From the waiver of the remaining secured debts pursuant to the settlement scheme, Tanco will have net exceptional gain of some RM118mil that will improve the company's net tangible assets by 35 sen per share,” Tan told StarBiz.

Group executive director Datuk Lynne Tan said there would also be a significant drop in the company's net gearing ratio to 0.09 from 1.83 now.

Tanco had, on Feb 21, reached an agreement with Lehman Brothers for the settlement sum of RM144.58mil which would involve RM44mil cash as well as the transfer and vesting of certain properties at an agreed value of RM100.58mil.

According to Tanco's circular to shareholders, these properties include parcels of land, houses and shophouses in Rawang and Seremban as well as a parcel of beachfront vacant resort development land in Port Dickson.

Tanco and its affected subsidiaries have signed a settlement agreement with Lehman Brothers Commercial, Lehman Brothers Pan Asian Investments Ltd and Malaysian Trustees Bhd to formalise the settlement scheme.

The settlement sum of RM144.58mil was arrived at on a negotiated basis.

Lynne said the cash settlement sum would be paid in five instalments over 12 months from the date of “consent judgment”.

The cash settlement sum would be funded through internal funds and bank borrowings.

“There is also the possibility for the cash settlement sum to be settled earlier,” she added.

Lehman provided a two-year loan facility of about RM239.6mil in November 2007 to repay Tanco's debt obligations which saw Tanco coming out of PN17 classification on Jan 17, 2008 after completing its debt restructuring exercise.

By The Star

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