Debt-saddled Oxley Holdings on Thursday announced a S$106.4 million ($80 million) investment in the Singapore developer by Hong Kong-based Dignari Capital Partners (DCP), in the form of convertible notes.
The notes carry annual interest of 4.5 percent, paid semi-annually, with a maturity of 24 months and an option to extend the maturity by a further 12 months, Oxley said in a release.
In what amounts to a stake sale, the notes can be converted into shares of the SGX-listed company at a roughly 15 percent premium to the volume weighted average price per share 10 trading days prior to the date of the agreement, 6 January 2021.
Oxley, which twice last year was subject to queries from the Singapore stock exchange related to its reporting, saw its shares rise 4.6 percent to S$0.23 in Thursday trading on the news.
Next Growth Phase
“I am pleased to welcome DCP into the Oxley family,” said Ching Chiat Kwong, executive chairman and chief executive of Oxley. “We look forward to a fulfilling partnership together where we hope to leverage on DCP’s expertise and full support to accelerate the growth of the company.“
Ching said the investment from funds managed by DCP would position Oxley “for our next phase of growth”, including residential and mixed-use projects in Dublin, London and Sydney totalling over S$2 billion in gross development value.
In a filing with the Singapore Exchange, Oxley said the net proceeds of the note issuance would go to working capital and general corporate purposes. In September of last year, in response to a query from the Singapore exchange, Oxley had reassured the regulator that, taking into consideration its plans for sales of units in its projects, and expected refinancing of short-term obligations, it remained confident in its ability to meet its financial commitments.
Grasping a Structured Debt Lifeline
According to Oxley’s press release, DCP has more than $1 billion in assets under management and a reputation for unearthing credit investment opportunities. During 2019, the six-year-old company headed by former Asia Debt Management partner Grace Tan hed a $626 million final close on its second China–focused debt fund, according to a filing with the US Securities and Exchange Commission.
“DCP has a core principle to provide support and capital to successful home-grown, global companies like Oxley in order to capture opportunities across Asia and beyond,” a DCP spokesperson said.
In August of 2020 Dignari agreed to provide $50 million in financing to Hong Kong-listed supply chain fintech platform Sheng Ye Capital to support an initiative for providing funding for small- to medium-sized businesses.
Righting the Ship
Oxley in recent years has made headlines less for its growth prospects than for its struggles with ballooning debt and subsequent asset disposals resulting from an earlier set of acquisitions.
The developer saw its debt rise to S$3.6 billion in late 2019 after an acquisition binge that included Chevron House at 30 Raffles Place, an ageing commercial complex that the developer agreed to purchase for S$660 million in December 2017.
That trophy acquisition came just one month after Oxley had purchased the Mayfair Gardens condo complex in Singapore for S$311 million in a collective sale. In July of 2017 the developer had teamed up with partners to purchase the Serangoon Ville project for S$499 million, after joining with Lian Beng Group to purchase the Rio Casa project for S$575 million in May of that year.
In a bid to shore up its balance sheet, Oxley in November 2018 agreed to sell a leasehold interest in a Dublin mixed-use property for €106.5 million ($120.4 million). In January 2019, the company sold another asset in the same Dublin project to US multi-family investor Greystar for €175.5 million.
Also in January 2019, Oxley announced plans to sell a pair of hospitality projects in Singapore’s upmarket Orchard Road area. After that attempt to sell the Mercure and Novotel hotels on Stevens Road to a firm reportedly owned by Indonesian tycoon Tahir foundered, the properties remain Oxley’s only hospitality assets in the city-state.
In April 2019, Oxley agreed to sell Chevron House for up to S$1.025 billion to a fund managed by US investment firm AEW, with the proviso that Oxley renovate and find a buyer for the property’s retail podium. Saudi investment group Olayan bought the podium in June 2020, reportedly for S$315 million.
Since its incorporation in March 2010, Oxley has launched a portfolio of 48 projects and completed 33. The group has a business presence across 10 geographical markets, including Singapore, Britain, Ireland, Cyprus, Cambodia, Malaysia, Myanmar, China, Vietnam and Australia.