Bond Articles


Oxley Holdings Ltd – Company Update

Timothy Ang  |   13 Apr 2020  |    500 views

We attended a conference call by Oxley Holdings on 8 April. Below are some highlights.

The primary goal is to conserve and accumulate cash to settle the maturing debt. This was indicated to be achieved by (i) not entering into any new construction projects, (ii) focusing on completing projects with most achieved sales to receive sales proceeds, and (iii) driving Singapore project sales by compressing margins.

(ii) Projects put on hold include Mozac in Vietnam (effective stake of S$38mn gross development value (GDV)) and parts of Oxley Towers Kuala Lumpur (S$848mn gross development value (GDV)). Construction will still proceed for parts of Oxley Towers Kuala Lumpur to unlock existing progress billings of S$114mn.

(iii) Strive for 95-100% Singapore projects sold by CY20. By having the early-mover advantage and lower construction costs, Oxley is able to sweeten deals by offering lower prices.

Project completions have been delayed, however no cash flow issues for now.

Key loans to note are corporate debt and bonds, which have to be paid at maturity. For the other loans, management indicated that project loans are only due when projects are completed and are repaid with project sales proceeds, while investment property loans are refinanced on a recurring basis.

S$150mn of bonds maturing in May 2020 are expected to be redeemed with existing cash. The company reported S$323mn cash on hand as at 31 December 2019.

Projects in Singapore (4 to TOP in CY20) are expected to be delayed by one month, and overseas projects including the Royal Wharf, The Peak and Dublin Landings pushed back three months by shut down orders and constrained supply chains.

The group does not foresee any cashflow issues for now and has additional financing avenues if needed. Some funding sources can be secured through (i) the group’s unbilled revenues (S$2.4bn from Singapore projects), and (ii) unencumbered hotels in Cambodia (indicative valuation S$150mn as of Feb 2020).

Low completion risk for key projects

For The Peak, 50% down payment is received from buyers, providing a good buffer for Oxley to resell the units for a discount if buyers fall out. For Royal Wharf in London, the UK government subsidises buyers and take on partof the default risk, while management indicated that Dublin Landings has a strong buyer.

Chevron House sale delayed by due diligence process during the lockdown

However, the buyer remains keen. If the retail podium is not sold by 30 Jun 2020, Oxley will have to purchase it at a steep discount from valuation and attempt to sell it in the market at current valuation at a profit. S$295mn remains to be received from the Chevron House sale.

 

 

Related Articles

Singapore’s First Infrastructure Bond Expected in October

The first Significant Infrastructure Government Loan Act (SINGA) bond will be issued soon for Singapore's development expenditure spending.

Phillip Bonds  |   16 Sep 2021

Starhill Global REIT: Stable Investment Grade Bonds

Starhill Global REIT is positioned for retail recovery as Singapore reopens, with a long WALE of 5 years and high occupancy of 99%.

Phillip Bonds  |   03 Sep 2021

What is a Commercial Paper: Fixed Income

Commercial papers are short-term debt instruments that typically pay higher yields than government bonds. Here's what makes them attractive.

Phillip Bonds  |   10 Aug 2021

Disclaimers


These commentaries are intended for general circulation. It does not have regard to the specific investment objectives, financial situation and particular needs of any person who may receive this document. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of the units and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. Investors may wish to seek advice from a financial adviser before investing. In the event that investors choose not to seek advice from a financial adviser, they should consider whether the investment is suitable for them.

The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the "Research") contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries.

Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned.

Enquiry


Have an enquiry? Get in touch with us at (+65) 6212 1818 or message us below!
Not yet an account holder? Open an account online here