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NEWS UPDATES 3 July 2010

Thai developer to clear debt

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The listed developer Krisdamahanakorn Plc (KMC) expects to clear the last of the 10-billion-baht debt it has been carrying since the 1997 financial crisis, says managing director Tanade Singkalavanij.

KMC's debt now stands at 500 million baht, including more than 300 million owed to Thai Asset Management Corporation and another 100 million baht-plus owing to Krung Thai Bank, he told the Bangkok Post.

The developer cleared its 500-million-baht debt with Bangkok Bank by transferring its ownership of the 18-hole Krisda City Golf Hills, located on a 350-rai plot in Nakhon Pathom, to the bank with an option to lease back the golf course for three years, he said. "We're going to clear it all [the debt] this year, but we have no plan to make an investment," said Mr. Tanade. "We are more conservative than before and don't want to have any more debt." The company plans to focus on residential developments on its existing plots and has no plans to buy new land this year.

KMC will focus only on low-rise condominiums with a maximum of eight storeys, as the product generates a faster return, within one year, than high-rise projects which take up to three years to complete.

He said Thai politics was not the only negative factor affecting the local market, the global financial situation was another key risk. The firm had no new project launches in the first half but sold units at its seven existing low-rise projects in Pin Klao, Phutthamonthon, Nakhon In, Rangsit, Min Buri, Theparak and Nakhon Chaisi.

In the second half, it plans to launch a new condominium project worth 400 million baht under The Kris brand on a 10-rai plot on Soi Ratchadaphisek 17 where four rai were used for the construction of three condominiums last year.

The developer said it had already sold 30 percent of the project and plans to launch another three condominiums worth a combined 1.4 billion baht on the plot next year.

KMC expects to achieve sales of 800 million baht from its condominium and low-rise units in the second half. It posted sales of 500 million baht from low-rise units in the first half. The company has a housing inventory worth 2 billion baht, comprising detached houses and allocated land plots.

"We were once among the top three developers with sales of 9 billion baht a year. We were an elephant," said Mr. Tanade. "But today we are a lamb. It's not that easy to be an elephant again if becoming an elephant makes us be a lamb again.

"Other [developers] that become elephants think as elephants. But we are a lamb and we must think as a lamb."

KMC shares closed yesterday on the SET at 0.40 baht, up one satang, in trade worth 160,000 baht.

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