Altair Developers reaffirm business confidence in Sri Lanka
Altair Developers has borrowed US$ 25 million (4.5 billion rupees) from three Sri Lankan banks to complete the 400-apartment Altair high-rise. A statement said that the syndicated loan comes from a group of banks – Ceylon Bank, NDB Bank, and National Savings Bank.
“One of the largest syndicated loans in the property development sector in Sri Lanka in recent times, the loan is intended to ensure that cash flows sustained at maximum liquidity rates at the final stages of the Altair project,” said Indocean Developers promoter Jaideep Halwasiya.
The statement said the loan is “a noteworthy vote of confidence” in the prospects for the project as well as for the real estate sector in general. This is in addition to the injection of funds to the tune of $251 million (45.6 billion rupees) that investors have already invested in Altair, whose offshore investments are subject to the legal limits set by Reserve Bank of India (RBI).
The syndicated loan, consisting of a component of the US dollar and a component of the Sri Lankan rupee, is repayable within 18 months with a six-month grace period. “This is a major development not only for Altair but for the property development sector in general, in the context of current market sentiment and increasing impairment charges and (bad loan) ratios in the banking sector,” said Moraes, Director of Indocean Developers.
NDB Investment Bank Limited (NDBIB) and Ceylon Bank negotiated the short-term syndicated loan. In a letter to Altair’s apartment buyers, Indocean Developers said that the security provided under this loan is the only burden on the project. Altair’s internal construction has been completed, and 70% of its apartments are already leased, priced from $525,000 to $2 million.
OSL Take:
The statement by Altair represents a clear indication of the rapid growth recorded in Sri Lanka’s house and property as well as construction sectors. Also, the confidence in banks for lending over US$25 million as syndication loan to development companies in Sri Lanka would provide an opportunity for foreign companies looking at entering in to Sri Lanka’s real estate market to form partnerships/joint ventures with local companies to engage in the Sri Lankan real estate sector.
| Article Code : | VBS/AT/20191105/Z_T1 |