SYDNEY- The Associated Press
Troubled Allco Finance Group Ltd. said Tuesday it sold part of its real estate arm in Singapore for 180 million Singapore dollars, equivalent to $132 million, to pay off its debts.
The sale to Singapore property developer Frasers Centerpoint Ltd. was comprised of Allco's 17.7 percent stake in Allco Commercial REIT and a 100 percent of Allco Singapore Ltd., which managed Allco Commercial REIT.
The sale will generate proceeds of more than 90 million Australian dollars, or $86 million, after loans associated with the investment are paid out, Allco said in a statement.
"The sale delivers a good profit result for Allco and releases a significant amount of cash, which will be directed toward lowering group debt and providing additional operating cash to support Allco's core business activities," Allco Chief Executive David Clarke said.
Allco Finance Group has begun restructuring since problems stemming from the global credit crunch sent shares in the company plummeting earlier this year, and the company reported it may be forced into record losses because of write-downs and other issues.
The company has so far been able to hold off creditors by negotiating extensions to loan facilities worth about A$250 million, or $240 million.
The sale, which is subject to approval by regulatory authorities in Singapore and Australia, is expected to be completed on Aug. 6.