Will Singapore need to save Capitaland like SIA in 2021?

[Dr Christopher Cheok C S]

Capitaland's net debt is $25billion, highest among local real estate companies. One may argue that Capitaland is sitting on over $80billion of assets but with an ultra-low asset turnover of 0.07 and huge exposures to retail scene in Asia, any force-sale value (FSV) of these properties to meet debt obligations in the next 12 months are likely to weaken Capitaland's debt-equity ratio.

As such, Capitaland will not offload major assets to reduce their debts. The next option will be to borrow more, from the current low-interest rates environment. However, at this moment, Capitaland's Long-term Debt-Equity ratio is nearly as high as Oxley (110-120 times) whose debts are trading at near-junk coupons. This is almost double that of many reputable big real estate companies in Singapore. Looks like, it is not advisable for Capitaland to tap the debt market further.

Now, with Liew Mun Leong's personal integrity in serious doubt now and Capitaland's weak financials, will Capitaland need a rights-issue within the next 12 months to shore up their balance sheet?

 

[congo9]

Right issue do are not for ordinary folks. Right issue are more for institutional investors then layman.

 

[laksaboy]

Capitaland has many investments in China. Therefore I don't think it can be saved.

 

[knnb40]

recently heard that Capitaland received "Green loan" from banker in Singapore .....what is "Green LoaN"

 

[syed putra]

recently heard that Capitaland received "Green loan" from banker in Singapore .....what is "Green LoaN"

Islamic banking

 

[CPTMiller]

Our country too many state own or related enterprise.
No choice at this stage
This has to be save to preventing State lose invested money
Government involved on the many business area in the first place has stop the full growth of local enterprise entrepreneurship.

 

[batman1]

HJ praised chairman Liew for a fantastic superman job in capital land. Don't worry,they may assign Ng yat Chung to the rescue.

 

[Dr Christopher Cheok C S]

Capitaland has four prominent babies AscT, CMT, CCT and CRCT. Lee and Liew adopted the same leverage strategy for all four, leaving them with a dollar in hand for ten dollars of debts. Further debt-raising will be more costly, and pose to wipe-out distributions and seriously, I don't think four of them dare to offload their major properties cheaply in the next 12 months to pay for their debts to avoid affecting covenants of their existing debts.

 

[congo9]

Capitaland has four prominent babies AscT, CMT, CCT and CRCT. Lee and Liew adopted the same leverage strategy for all four, leaving them with a dollar in hand for ten dollars of debts. Further debt-raising will be more costly, and pose to wipe-out distributions and seriously, I don't think four of them dare to offload their major properties cheaply in the next 12 months to pay for their debts to avoid affecting covenants of their existing debts.

If you off load your property at a cheap price to pay for debts,your competitor will sit around and wait for you to down your price further. It causes a domino effect when you off load your property at a cheap price. Next your share price will be affected. Your ability to service your loan is in doubt.

So CL now without influx of tourists is a sitting duck.

 

[JustLikeThis]

The way I see it is that, speculators are raiding Temasek's counters one-by-one.

After SIA, Sembcorp and Keppel, next could be SPH and Capitaland. These five companies have a common weakness, they only want to grow the company to justify for their management's huge payroll, regardless whether it is sustainable or not.

 

[Dr Christopher Cheok C S]

If you off load your property at a cheap price to pay for debts,your competitor will sit around and wait for you to down your price further. It causes a domino effect when you off load your property at a cheap price. Next your share price will be affected. Your ability to service your loan is in doubt.

So CL now without influx of tourists is a sitting duck.

You remind me of Jewel. Liew is from Changi Airport Group and Capitaland.