There is finally light at the end of the tunnel for Tanco and its Lehman Loan.
The company had secured banking facilities amounting to rm77 million from Bank Kerjasama Rakyat Malaysia Bhd. It will use the money to settle the rm24 million it still owes to Lehman Brothers.
Recall that Tanco’s loan from Lehman had ballooned to rm300 million. It was engaged in a legal battle with Lehman Brothers for years over the loan in 2007 and finally agreed on a settlement of rm144.6 million in 2011.
The settlement involves the payment of rm44 million cash and the transfer and veting of certain properties at an agreed value of rm100.63 million.
Once the settlement is completed, Tanco will gain access to the other properties that have been locked by the lengthy litigation process. Then it could focus on moving forward.
For FY2011 ended June, some rm260 million worth of assets – freehold land with a net book value of rm105.8 million, a golf course, resort properties amd buildings, among others – were charged to Lehman to secure the borrowings and would be discharged upon completion of the settlement.
This is expected to have a positive impact on the net assets of the group. The estimated positive impact is a result of net exceptional gain of about rm131 million before taxation arising mainly from the waiver of the remaining secured debt, pursuant to the settlement scheme.
The net exceptional gain would bump up its net earnings per share by 39 sen. Its net assets per share would also increase from 52 sen to 91 sen while gearing would be reduced from 1.83 times to 0.11 times.
Part of the rm77 million obtained would be used to finance the working capital requirements and construction cost for a proposed mixed use development in Palm Springs Resorts City .
The company had secured banking facilities amounting to rm77 million from Bank Kerjasama Rakyat Malaysia Bhd. It will use the money to settle the rm24 million it still owes to Lehman Brothers.
Recall that Tanco’s loan from Lehman had ballooned to rm300 million. It was engaged in a legal battle with Lehman Brothers for years over the loan in 2007 and finally agreed on a settlement of rm144.6 million in 2011.
The settlement involves the payment of rm44 million cash and the transfer and veting of certain properties at an agreed value of rm100.63 million.
Once the settlement is completed, Tanco will gain access to the other properties that have been locked by the lengthy litigation process. Then it could focus on moving forward.
For FY2011 ended June, some rm260 million worth of assets – freehold land with a net book value of rm105.8 million, a golf course, resort properties amd buildings, among others – were charged to Lehman to secure the borrowings and would be discharged upon completion of the settlement.
This is expected to have a positive impact on the net assets of the group. The estimated positive impact is a result of net exceptional gain of about rm131 million before taxation arising mainly from the waiver of the remaining secured debt, pursuant to the settlement scheme.
The net exceptional gain would bump up its net earnings per share by 39 sen. Its net assets per share would also increase from 52 sen to 91 sen while gearing would be reduced from 1.83 times to 0.11 times.
Part of the rm77 million obtained would be used to finance the working capital requirements and construction cost for a proposed mixed use development in Palm Springs Resorts City .
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