Keppel divests stake in Chengdu real estate firm for $324 million
SINGAPORE (THE BUSINESS TIMES) – Keppel Land China will divest 100 per cent of its equity interest in Chengdu Shengshi Jingwei Real Estate through its subsidiary Hillwest for approximately 1.6 billion yuan (S$324 million).
In a bourse filing on Thursday morning (July 29), Keppel Corp announced that the buyers of the sale shares, subsidiaries of China Vanke Co, will pay approximately 1.4 billion yuan to Hillwest for the sale shares in Chengdu Shengshi, subject to completion adjustments.
The buyers will also pay an additional 156 million yuan to a related company of Hillwest as repayment for loans extended to Chengdu Shengshi.
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Chengdu Shengshi will no longer be a subsidiary of Keppel following the completion of the divestment. The company owns a residential development project in Mumashan, Chengdu, China.
The consideration was arrived at on a “willing buyer-willing seller” basis and took into account factors such as the location of the site and prevailing market conditions.
Keppel also noted that the adjusted net asset value on the agreed value of the site attributable to the sale shares was approximately 1.4 billion yuan as at June 30.
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After the divestment, the conglomerate expects to recognise a gain of about 668 million yuan.
Based on Keppel’s audited financial statements for financial year 2020, the net tangible asset per share as at Dec 31 would have increased from $5.02 to $5.09 had the divestment been completed then. The loss per share for that year would also have fallen from 27.8 cents to 20.5 cents after the divestment if it had been completed on Jan 1 last year.
The loan repayment and 80 per cent of the consideration for the sale shares, worth about 1.1 billion yuan, will be made in the next seven working days, while the remaining 20 per cent of the consideration will be paid on or before Nov 30.
Eighty per cent of the sale shares will be transferred to the buyers after the first instalment is paid, while the remainder will be transferred within a week following the completion of the first transfer of the sale shares.
Completion of the divestment is expected to take place by the second half of this year.
Shares of Keppel Corp closed three cents, or 0.6 per cent, higher at $5.28 on Wednesday.