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SUBSIDIARIES of Keppel Land have engaged in a share swap arrangement with a Vietnamese real estate company that will end up with the two of them swapping full ownership of two units.
Keppel Corporation, the parent of Keppel Land, said in a filing to the Singapore Exchange on Tuesday night that one of the deals will see the Singapore conglomerate's VN Investment Pte Ltd buy a 40 per cent stake in the charter capital of Riviera Cove Joint Venture Limited Liability.
The cash consideration is VND131.46 billion (S$8.31 million). Riviera Cove is a unit of Hung Phu Real Estate Investment Corporation (HRPE).
The other deal will see Keppel's Belwynn Pte Ltd sell a 60 per cent stake in the charter capital of Belwynn Hung Phu Joint Venture Limited Liability (BHP) to HRPE for a cash consideration of VND327.72 billion.
Both VN Investment and Belwynn are wholly-owned subsidiaries of Keppel Land. They have arrived at the deals on a "willing buyer, willing seller" basis, taking into account the future prospects of the businesses as well as the fair value of the assets.
As at Dec 9, the net asset value of the Riviera Cove stake was about S$7.96 million. Following completion of the acquisition, Riviera Cove has become a wholly-owned subsidiary of Keppel Land and Keppel Corp.
For Belwynn, the net asset value of the stake was about S$20.19 million. As at Dec 9, BHP has ceased to be a subsidiary of Keppel Land and Keppel Corp.
The share swap will enable both Keppel Land and HPRE to have full ownership in Riviera Cove and BHP, respectively. "In particular, Keppel Land will be able to increase its interest in Riviera Cove from the current 60 per cent to 100 per cent. The exercise allows both parties to unwind the cross holdings to facilitate better control of the respective projects," said Keppel Corp.
It added that the share swap is not expected to have any material impact on the net tangible assets and earnings per share of the company for the financial year ending Dec 31, 2016.