Thursday, July 25, 2024

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JKH owned Cinnamon Life Colombo nears settlement in apartment units

Cinnamon Life Colombo owned by John Keells Holdings PLC (JKH) the first integrated resort in Sri Lanka and the largest private investment in the country is set to hand over the residential apartments and commercial office spaces completing the selling of those units. 

JKH attributed the increase in profitability to the profit recognition of the residential apartment units at ‘Cinnamon Life’. 

Revenue and profit recognition in ‘Cinnamon Life’ will continue throughout the financial year as the handover of the residential apartments and commercial office spaces already sold will be completed, in addition to new sales recorded.

John Keells Holdings PLC (JKH) said yesterday it has successfully refinanced the $ 395 million syndicated loan at Cinnamon Life which was due for repayment in July this year. 

The exercise was done through a $ 225 million long-term loan facility and a six-month bridging facility of $ 100 million.

In a filing to the Colombo Stock Exchange, JKH said the $ 225 million loan was concluded at a rate similar to the previous facility, taking into account step-down pricing mechanisms based on pre-agreed triggers. 

The facility is a five-year loan with a two-year grace period and back-ended capital payments. 

The $ 100 million bridging facility was structured to align with the maturity date of July 2022 of the original facility.

The refinancing move was first announced in JKH’s second quarter interim results statement. It said the Group was in final stages of discussions to refinance a component of this loan while utilising the proceeds from the sales of the apartments and cash reserves to settle part of the loan.

Whilst JKH’s FY223Q results are expected this week, in the 2Q Property industry group EBITDA at Rs. 1.26 billion was a significant increase from a negative Rs. 12 million a year earlier. 

Whilst the restrictions imposed during the quarter under review impacted the momentum of construction at ‘Cinnamon Life,’ particularly the mobilisation of labour, the available resources have been mainly focused on the completion of the residences and the office towers, for handover as planned. 

The finishing work of the hotel, including cladding, installation of the façade, glazing, and interiors of rooms is progressing well. 

The Group has commenced discussions with key tenants for the retail mall, with various alternatives being considered for the retail space to ensure unique attractions and offerings.

During 2Q, ‘The Offices’ at ‘Cinnamon Life’ entered into an agreement with HCL Technologies of India, global technology company, to occupy over 80% of space in the 30-storey Grade-A office building. 

JKH said the company’s commitment as the anchor office tenant at ‘Cinnamon Life’ added immense value to the project as a whole, as the office spaces are poised to attract a dynamic local and expatriate workforce.

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