Monday, October 17, 2016

Cedar Strategic

Cedar Strategic: Acquiring a 49% stake in Yangon development, Golden City
- Acquiring a 49% effective stake in Golden City, a mixed-use luxury development with a GFA of 335,284 sqm in Yangon Myanmar through DAS for US$24.9m.
- The acquisition will be executed in two phases with the first phase entailing the acquisition of a 75% stake in DAS from various vendors to be completed by end 2016.
- The final phase will see the acquisition of the remaining shares in DAS from D3 Capital. The final phase is subject to approval at an EGM in 1Q17.
- To be funded through internal resources as well as a shareholder loan of US$5m from controlling shareholder Luo Shandong (27.7% stake). The loan will carry a 6% interest rate and will have a term of 18 months from the date of disbursement. Golden City will have a gross development value of US$694m upon completion in 3-5 years time.

Note that company has no debt as at 2Q16 and has cash reserves of RMB56.8m (~US$8.4m). This implies that the company could take on more debt to fill in the gap of about ~US$11.5m to fund the acquisition.

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