CDL to raise $1.5b via Sentosa Cove investment platform
CITY Developments Limited (CDL) will raise a total of $1.5 billion through a partnership with Blackstone's Tactical Opportunities Fund and CIMB Bank Berhad, Labuan Offshore Branch to create an investment platform that will invest in the cashflows of CDL's properties in Sentosa Cove.
Announcing this yesterday, CDL said that the Profit Participating Security, as the investment instrument is called, will see that the investors receive a fixed payout based on 5 per cent interest per annum for a period of five years, in addition to a participation in the cashflows over the period that they hold the Profit Participating Security.
The total aggregated value of the Profit Participating Security is $750 million. Some $281 million will be subscribed by Astoria Holdings, a wholly-owned subsidiary of CDL. Blackstone's Tactical Opportunities Fund will invest $367 million and CIMB Bank will contribute $102 million.
Concurrently, DBS Bank and OCBC Bank will provide $750 million in value of senior loan facilities.
The Quayside Collection, an upscale integrated development on Sentosa island, comprises three adjacent properties developed by CDL: the five-star Hotel W Singapore at Sentosa Cove; Quayside Isle, a waterfront food- and-beverage and retail property; and The Residences at W Singapore at Sentosa Cove.
CDL executive chairman Kwek Leng Beng said of the move: "This offers investors a rare opportunity to participate in the cashflow from high-quality assets in Sentosa Cove. By leveraging on the operating strength and solid cashflows of the Quayside Collection, we will be able to build and deploy capital for our global plans."
The Profit Participating Security is the latest in a number of unique platforms which CDL has unveiled. Several years ago, it broadened the range of financial instruments it can use by issuing Islamic bonds, and was also the first to launch a hotel-based real estate investment trust.
THE BUSINESS TIMES