CHHB to draw down RM150m redeemable secured bonds early

KUALA LUMPUR: Country Heights Holdings Bhd (CHHB) will completely redeem its 1996/2011 RM150 million 3% to 8% redeemable secured bonds ahead of their extended maturity date at Dec 31, 2011.

In a Bursa filing, the group said it has opted for the early redemption of the bonds to reprofile the group's borrowings to better suit its cash flow and free the group of "overly restrictive covenants" which have hampered its growth over the past years.

The group said the funding will come from group managing director Tan Sri Lee Kim Tiong, who will offer a friendly loan totalling RM84.45 million and a term loan facility from Malayan Banking Bhd (Maybank) of RM75 million.

CHHB had executed a loan agreement with Lee and a term loan facility agreement with Maybank on Dec 22 and Dec 28 respectively.

According to the group, the friendly loan will be for a period specified by Lee, but will not exceed 12 months from the date of the loan agreement.

The group will have to repay the loan within 14 days after receiving a demand for repayment from Lee, who is also the sole beneficiary of the bonds and is thus deemed interested in the early redemption.

Meanwhile, the term loan facility will be used to partially redeem the bonds, and has a tenure of four years from the date of first drawdown.

The availability period for the facility is siz months from the date of the letter of offer, and the undrawn portion upon the expiry of the availability period will be cancelled.

Interest chargable under the loan is at a base lending rate, which is currently 6.3% per year, plus 2% annually.

The repayment of the loan outstanding under the facility is 36 monthly instalments, with the first monthly instalment to start a year after the first drawdown.

The bank has placed a first legal charge for RM75 million over the Palace of the Golden Horses, it said.
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