Project financing for an overseas property development
Situation
The company is a reputable property development company and is a subsidiary of a public listed company in Malaysia. As part of its expansion plan to invest overseas, it intends to purchase a piece of land in a neighboring country and develop it into a commercial site. The land purchase and development costs amounted to about RM120 million, have to be funded with foreign currency loan.
Actions / Challenges
Leap Forth was appointed to arrange for a foreign currency financing for this project development. As the loan involved foreign currency, Leap Forth submitted the loan proposal to several offshore banks in Labuan. However, all the offshore banks were not comfortable with the financing of such property development. The rejection letters from the offshore banks were used to obtain approval to source for the financing from local banks.
Results
A leading local bank, which is actively involved in financing Malaysian companies for overseas investments, finally approved the financing. The approved amount was RM80 million equivalent of USD currency. The facility was released in phases, with the first phase to finance the purchase of the land.
The company is a reputable property development company and is a subsidiary of a public listed company in Malaysia. As part of its expansion plan to invest overseas, it intends to purchase a piece of land in a neighboring country and develop it into a commercial site. The land purchase and development costs amounted to about RM120 million, have to be funded with foreign currency loan.
Actions / Challenges
Leap Forth was appointed to arrange for a foreign currency financing for this project development. As the loan involved foreign currency, Leap Forth submitted the loan proposal to several offshore banks in Labuan. However, all the offshore banks were not comfortable with the financing of such property development. The rejection letters from the offshore banks were used to obtain approval to source for the financing from local banks.
Results
A leading local bank, which is actively involved in financing Malaysian companies for overseas investments, finally approved the financing. The approved amount was RM80 million equivalent of USD currency. The facility was released in phases, with the first phase to finance the purchase of the land.
