Pacific Star Development amends loan facility with OCP Asia with higher interest rates

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Pacific Star Development said Thursday it has amended its S$72 million loan facility agreement with funds managed by OCP Asia (Singapore), an institutional investor and manager of private investment funds, with the deal resulting in a longer tenor and a higher interest rate.

The loan previously had a cash interest component at a rate of 7.5 percent per annum payable in arrears every three months and a payment-in-kind interest component at 5.0 percent per annum, the company said in a filing to SGX.

Under the amended facility agreement, the cash interest component is eliminated and the payment-in-kind interest component will continue at a rate of 25 percent per annum, compounded quarterly and capitalised to the outstanding principal amount, Pacific Star said.

In addition, the lenders will charge an amendment fee of S$12,500 a day to be capitalised at the end of each quarter, the filing said.

The facility had originally been set to mature on 28 December 2020, but it has been amended to 5 October 2023, the filing said.

Profit-share arrangements under the original facility agreement have been terminated, the filing said.

As of 1 October, the consolidated principal amount is S$113.73 million, the filing said.

The funds acting as lenders to Pacific Star Development are OL Master (Singapore Fund 1), Orchard Landmark II (Singapore Fund 1), and OCP Asia Fund III (SF 1), the filing said, noting they carry out secured direct lending investments.

New S$30 million loan facility

In a separate filing to SGX, Pacific Star Development said its main subsidiary, Pearl Discovery Development, entered a S$30 million loan  facility agreement with funds managed by OCP Asia (Singapore).

Pearl Discovery Development is the development company of Puteri Cove Residences, the group’s property development project, a mixed use development including condominiums, serviced suites, SOHO and a lifestyle retail center, located in Iskandar Puteri in Malaysia, the filing said.

Under the deal, the principal amount is S$15 million , with an increased commitment of S$15 million, and a payment-in-kind interest rate of 12.5 percent per annum compounded at the end of every month and capitalised to the outstanding principal amount, the filing said. The maturity date is 5 October 2023, the filing said.

The loan is secured by assets including a disbursement and other accounts held with UOB, second-ranking debentures over all of Pearl Discovery’s assets and each unit in the Puteri Cove Residences which hasn’t been sold and second-ranking assignment of the rental and sale proceeds from Puteri Cove Residences.

“The rationale for obtaining the Loan is to provide for near term funding,” the company said in the filing, sayin g the proceeds are earmarked for prepaying part of an existing loan, paying its main contractor and other professional parties at Puteri Cove Residences, making outstanding tax payments and penalties and other operating expenses.

The funds acting as lenders to Pearl Discovery are OL Master (Singapore Fund 1), Orchard Landmark II (Singapore Fund 1) and OCP Asia Fund III (SF 1), the filing said.