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Rowsley gets SGX nod to issue new shares for Ariva purchase
REAL-ESTATE company Rowsley has received the nod from Singapore Exchange (SGX) to issue new shares to fund a multimillion-dollar acquisition.
It said in a filing to SGX on Wednesday that it has received approval in-principle for the listing and quotation of 53.3 million new ordinary shares in the capital of the company, to be issued at S$0.15 per consideration share, in connection with the proposed acquisition of hotel manager Ariva.
The final approval is subject to Rowsley disclosing earn-out details, the moratorium and the vesting of the consideration shares, and also revealing the financial effects of the proposed acquisition on the unaudited financial results of the first half of financial year 2016.
"The company will be making a separate announcement in relation to the disclosures to be made in due course," said Rowsley.
Earlier this month, Rowsley said it has signed a conditional sale and purchase agreement with vendors to buy Ariva for up to S$10.6 million.
Ariva, founded in October 2008, has more than 6,500 room keys under management and in the pipeline, spread over 47 properties across the Asia-Pacific. Ariva manages hotels and service apartments under its own and associate companies' brands - Ariva, Amar and Louis Kienne - as well as third-party brands.
Payment for the deal will be in cash, of which the new allotment will form part of it. Rowsley has 4.67 billion outstanding shares, Bloomberg data show.
The final purchase price is subject to terms and conditions set out in the agreement which include the achievement of cumulative net profit after tax target of S$5.2 million up until December 2019.
Rowsley said Ariva is financially profitable, and its contribution is expected to increase over time as Ariva's assets under management grow rapidly. Ariva will also bring to Rowsley additional industry expertise and market access to accelerate the growth of Rowsley's current hotel brands in the Asia-Pacific region, it added.
Rowsley's counter moved higher by 0.1 Singapore cent to close at S$0.121 on Tuesday.