4 September 2021 12:22 am Views - 1273
As my heart fill with sorrow at the passing of this grand old man, I sat down and started reminiscing about my association with him and his contribution to Sri Lanka.
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S.P. Tao |
In January 2003 as Chairman of Bank of Ceylon (BOC) I was going through board papers for the first board meeting I was going to Chair. As fate would have it an important board paper was the loan that ORCL— Overseas Realty had taken to construct the World Trade Centre in Colombo. S.P Tao had pledged his family’s cash assets of six million US dollars placed in a fixed deposit, which was earning a very high interest rate.
The Bank structured an instrument called RCCPS - Redeemable Convertible Cumulative Preference Sharesa first for our country. Which meant there was no repayment of capital, or interest for the period of this instrument, and on maturity, if the loan was unpaid BOC would receive preference shares valued on the day of conversion.
I looked at the share price, of ORCL it was less than Rs 5! The company owned over 95 percent of the shares. I asked the General Manager to arrange a meeting for me with S.P Tao Chairman of ORCL.
He flew down from Singapore to meet me and during the meeting I told him the Bank did not want shares in his company and in my characteristic forth rightness added “our loan has now become a distressed loan technically.”
I then suggested that since they were selling space at the WTC at USD 160 per sq ft that we could look at a distress rate value of USD 80 per sq ft! And asked him to please transfer 8 floors of the building to BOC in lieu of the loan. The amazing thing about great business leaders are is they take calculated risks and also know when to cut their losses and cut deals that eventually are win-win. He agreed.
BOC immediately rented them to the Board of Investment (BOI).
Wasting no time, during this same meeting I asked him to come with me and the General
Manager of BOC to visit the Wellawatte Spinning and Weaving Mills premises. 17 acres of land in an excellent location, an idle asset unused for over 20 yrs and not even used as a car park.
S. P. Tao was a very successful Property developer in Singapore having developed the famous hotel complexes, Marina Mandarin, Pan Pacific, and as I had done my homework and knew his potential and strengths. I asked him to consider developing the Wellawatte land, into a residential / commercial complex.
He agreed and the result is very visible, when you drive along the High level rd.It has been one of the most successful reclamation of a dead asset into a vibrant city within a city as they position the residential area.
I learnt a lot from my discussions with this visionary human being.He had many issues, with the subsequent management of BOC, who owned 40% of the company and the project was unduly delayed.
On one occasion he wrote me a letter to say “Sumi had you remained Chairperson of BOC, I would have completed the entire project in three years! Instead, it took over a decade. An investor with lesser grit would have not stayed but he did though China, Hongkong, Singapore had so much more to offer in terms of enabling policy and environment. Finally he bought out BOC shares giving them a huge profit! Today Overseas reality is one of the most successful and benchmark property development our country has known
He has left behind two exceptional land marks in the City of Colombo, it is a testament to the quality of their construction that he weathered a bomb blast at WTC with minimal structural damage to the towers, and had the resilience and grit to stay on in this country and support it with further investment during that dark period
I am blessed to have met such an individual in my life time. He was a man of stature and huge personal achievement. He was also a friend of Sri Lanka who took a gamble on a war ravaged and underperforming country and despite the many trials and tribulations, he created wealth and iconic real estate value.
I Salute and honour him with these memories.
May God Bless him and may he his soul rest in peace.