Deloitte & Touche was the external financial advisor appointed by the property group on Nov 4, 2020, to assist the group in evaluating and reviewing its 51.01% joint venture (JV) equity investment in China-based Sincere Property Group.
CDL says it is still in the process of finalising the complete audit of Sincere Property.
The final quantum of impairment cannot be determined yet, as the group is in the process of restructuring some assets, and the situation remains “fluid”.
The group says it will disclose detail of its financial performance when it announces its financial results for the FY2020.
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As at Dec 31, 2020, CDL’s total investment in Sincere Property stands at $1.8 billion.
According to the company, it has not provided any further liquidity support or corporate guarantees to Sincere Property since.
“Apart from the challenges imposed by the pandemic, China’s ‘three red-lines’ rule restricting bank borrowing for real estate firms is expected to have significant impact on all Chinese developers,” says CDL in a Jan 21 statement.
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“The deterioration in market conditions, ongoing uncertainty and regulatory restrictions have disrupted and negatively impacted Sincere Property’s operations and performance in the near-term. Furthermore, poor market conditions have derailed the intended divestment plan for some of Sincere Property’s retail and hospitality portfolio to reduce its debt, exacerbating the liquidity challenge it currently faces,” it adds.
Shares in CDL closed 4 cents higher or 0.5% up at $7.68 on Jan 21.
See also:
- City Dev to acquire 51.01% joint controlling interest in China’s Sincere Property Group for $0.88 bil
- Citing disagreements over investment in China, Kwek Leng Peck quits CDL's board
- CDL appoints Deloitte & Touche as external financial advisor to evaluate investment in Sincere Property Group
- Another CDL director resigns in relation to Sincere Property investment
- Third CDL director resigns in relation to Sincere Property investment
- CDL appoints special working group to review and improve liquidity and profitability for Sincere Property Group
- CDL's Sherman Kwek seeks to salvage Sincere Property deal
- CDL records $1.78 bil impairment on Sincere Property Group; declares $1.92 bil loss for FY20
- CDL's Sincere Property RMB Bonds downgraded to AA-
- CDL begins monetisation of Sincere’s assets
- City Developments looks beyond Sincere
- CDL and Sincere: the blame game begins as Sincere defaults on bond
- City Developments reiterates ring-fencing of exposure to Sincere amidst bankruptcy proceedings
