City Developments has issued an SGX statement saying it does not expect any impact on the company and the South Beach development project arising from recent press reports on Dubai World’s debt troubles.

“As indicated in the Company’s announcement in June 2009, the joint venture company, South Beach Consortium has already secured fresh funds via a combination of a $800 million bank loan for a two-year term and $400 million in secured convertible notes, the latter subscribed by four investors — namely $195 million by a wholly-owned subsidiary of the Company and $205 million by three other notes investors,” says Singapore’s second largest property developer.

Dubai World, through its subsidiary, Istithmar Beach Road FZE, currently holds a one-third share in the project. Should the joint venture company require additional funds in the future, the shareholders may be called upon to put in their proportionate share of funding, says the property developer. A shareholder may be diluted if it does not fulfill its obligations to fund the joint venture company. The joint venture company may also choose to issue further notes if more funds are required and any noteholder and/or shareholder may subscribe for the notes, it adds.

“At the moment, it is too premature to anticipate the intentions or possible actions of the joint venture partners in relation to the South Beach development project. As South Beach is an iconic development and one which has excellent potential, should there be an opportunity to raise its stake in the South Beach project, the Company is certainly open to explore,” City Developments concludes.