CITY Developments (CDL) has fully settled an obligation for a corporate guarantee given by CDL to a financial institution in relation to a loan extended by the financial institution to HCP Chongqing Property Development (HK) Co.

Together with interest accrued, the amount worked out to US$213.1 million, or about US$100,000 more than the provision of US$213 million made by the group in H2 2020 for the corporate guarantee.

"The CDL group will continue to protect its rights as a creditor in relation to the repayment of outstanding loans extended by the CDL Group to HCP Chongqing Property and Chongqing Sincere Yuanchuang Industrial Co," CDL said in a statement to the Singapore Exchange on Saturday (Oct 9). It was responding to queries issued on Sept 23 by Singapore Exchange Regulation (SGX RegCo) linked to its divestment of cash-strapped Sincere Property Group.

Last month, CDL announced that it had sold its 51 per cent stake in China-based Sincere for US$1.

It also said at the time that it was selling its 63.75 per cent interest in HCP Chongqing Property to an unrelated third party incorporated in Seychelles. HCP Chongqing Property holds an 80 per cent equity interest in Sincere.

The settlement of the obligation is not expected to have a material impact on the earnings per share or the net tangible asset per share as well as the net gearing ratio of the group for the financial year ending Dec 31, 2021, CDL added.

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Shares in CDL closed at S$7.09 last Friday (Oct 8), up S$0.010 or 0.14 per cent.