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ASPIAL Corp is spinning off its property development arm in a listing on the Singapore Exchange's Catalist board to raise funds for property acquisition and construction, and for working capital.
The amount that will be raised and the timing of the initial public offering have not been set.
World Class Global undertakes the property development business in Australia and Malaysia for Aspial, which also runs jewellery stores and pawnshops.
World Class Global non-executive chairman Koh Wee Seng, who is also chief executive of Aspial, and World Class Global chief executive Ng Sheng Tiong, who is Mr Koh's brother-in-law, will be selling shares in the offering. Each of them holds 5 per cent of World Class Global's pre-listing issued share capital.
ZICO Capital, as the sponsor and issue manager, will also receive some shares as payment. UOB KayHian is the underwriter and placement agent for the deal, while OCBC Bank is the sub-placement agent.
World Class Global, which was incorporated in 2013, has been loss-making since 2014. In 2016, the company posted a net loss of S$6.3 million. Net asset value as at end-December 2016 was S$88.4 million.
The losses reflect accounting policies that prohibit recognising revenue until projects are completed, the company said in its preliminary prospectus. No development projects were completed in 2015 and 2016 and handed over to purchasers.
In Australia, World Class Global has launched three projects for sale. The Australia 108 condominium in Melbourne is 97 per cent sold for A$949.7 million with completion and handover expected in two stages in 2018 to 2020. AVANT in Melbourne, also a residential project, is 94 per cent sold for A$270.6 million, with handover expected by end-2018. The residential units in the mixed-use Nova City in Cairns was 9.6 per cent sold as at end-December 2016 following launch in October 2016.
World Class Global plans to declare an annual dividend of up to 50 per cent of net profit for the financial year ending Dec 31, 2019, and thereafter, subject to the board's discretion.