Areeya gets 3.8 billion baht from TMB
The listed developer Areeya Property Plc has obtained project funding of 3.8 billion baht from TMB Bank and plans to develop three more projects worth a combined three billion baht in the second half of the year. Chairman and chief executive Wisit Laohapoonrungsee said the loan would help Areeya start construction of projects from which the company targeted to generate revenue of about 5.5 billion baht in 2008.
The loan would support the construction of three 'a Space' condominium projects in Onnuj, Asok-Ratchada and Kaset-Navamin areas, the last of which would be launched next month. The repayment period is about three to four years with the interest rate at minium lending rate minus 0.5-1% a year.
The company would also obtain premium interest rates for the 20 rai plot in the Asok-Ratchada area it bought from TMB Bank's non-performing loan portfolio for 850 million baht. For this amount, it pays zero interest for the first year, MLR-3% and -2% for the second and third years respectively.
Meanwhile, TMB Bank will also offer special low-interest rates for buyers of the three projects. Qualified borrowers would receive loans up to 95% of the appraised prices and enjoy a payback period of up to 25 years.
Currently, the a Space projects have combined sales of 5.4 billion baht 3.3 billion baht from Asok, 1.8 billion baht from Onnuj and 300 million baht from the Kaset Navamin project, said Mr Wisit.
Early this month, Areeya signed a contract with ABN Amro in Hong Kong for a US$ 20 million bridge loan for the development of new projects. The financial cost would be 7% per year. ABN also has the right to convert the loan into equity at 3.50 baht per share.
''We aim to reduce our debt to equity ratio, which now stands at two to 2.5 times, to lower than two times next year after generating revenue from transferring condominium units,'' he said.
The company expects to realise revenue of about one billion baht by the end of the year. During the first half of the year, it recorded sales of 700 million baht from single houses and projected to book 500 million baht in the second half. Last year, it generated a net profit of 8-9 million baht.
''A year ago, property developers' gross profit margins dropped considerably as they engaged in a price war to maintain their shares,'' he said.
He said the company did not use the pricing strategy so it could maintain the gross margin at 30% for low-rise development and 40% for high-rise projects. But its net profit margin was only 1-2% as fixed costs remained unchanged.
''We're waiting to see how the competition will turn out and the market is now unclear.''
By the second half, the company plans to launch three new projects two townhouse projects with a unit price of lower than two million baht, and another 'a Space' condominium.
Areeya shares (A) closed yesterday on the Stock Exchange of Thailand at 3.72 baht, down two satang, in trade worth 319,000 baht.
Bangkok Post (11 July 2007)
วันที่ 2 สิงหาคม 2550