SINGAPORE-LISTED conglomerate Keppel Corp said after Monday trading close two of its subsidiaries have entered into agreements to divest their interests in Keppel Bay Property Development (Shenyang) Co Ltd (KBPDS) to Shenyang Vanke Property Development Co Ltd for 503 million yuan (S$105 million).

The two subsidiaries, Da Di Investment and Shanghai Merryfield Land Co, hold interests of 80 per cent and 20 per cent respectively in KBPDS, an entity that owns a residential township project in China's Shenyang city.

Keppel Corp has an effective interest of 99.8 per cent in KBPDS held indirectly through Keppel Land China, which holds the two subsidiaries. The conglomerate's share of the consideration for the proposed divestment is 502 million yuan.

The divestment is expected to be completed by June 2018, with the agreed consideration to be settled via two separate payments.

Some 316 million yuan will be paid on completion of share transfer. Another 187 million yuan (see amendment note), secured by an irrevocable bank guarantee, will be paid on satisfaction of certain conditions or one year after the signing of the agreement, whichever is earlier.

Keppel Corp said that this divestment is in line with the strategy of its property arm to recycle assets to seek higher returns and rebalance its portfolio to focus on selected high-growth cities in China.

Amendment Note: The amount secured by irrevocable bank guarantee should be in Chinese yuan not Singapore dollars. The article has been amended to reflect this.