Builder of Suzhou mega-project seeks loan grace period

THE developer of Singapore and the mainland's showcase joint venture Suzhou Industrial Park has denied it is in financial difficulties, but admitted asking bankers for grace on an overdue loan.

China-Singapore Suzhou Industrial Park Development (CSSD), the joint developer of the US$20 billion mega-project, says it has asked bankers for an extension on a $10 million loan repayment which was due on April 20.

It claims that the late-payment, which represents one tranche of a $50 million loan, has resulted from the bust-up between the industrial park and the neighbouring, cut-price Suzhou New District.

The park's Singapore backers say they are not prepared to provide CSSD with fresh funds to meet its debt commitments until the dispute is resolved.

When Singapore committed itself to the park in 1994, it claims it had no idea the Suzhou municipal government would later open a cheaper rival just around the corner.

The Singaporeans want the mainland authorities to demonstrate their commitment before pumping in more funds.

Singapore submitted a detailed proposal to Beijing in March in a bid to resolve the conflict which has been dragging on for over a year.

The park's developer said the Singapore backers, Singapore Suzhou Township Development, were prepared to provide a new loan which would have prevented a default on the April repayment of the syndicated loan - but only when the row was settled.

The developer said the statement aimed to "address the rumour in the market that CSSD is in financial difficulty and is defaulting on its repayments to the banks".

Lim Neo Chian, CSSD's chief executive, has described the negotiations over the two competing industrial parks as "protracted".

The developer said: "After more than a year of negotiations, both sides have yet to reach a settlement.

The $50 million in loans taken out by the developer was provided by 15 banks, lead managed by Singapore's Keppel Tat Lee Bank.