Tat Hong unit surrenders Gul Crescent lease to JTC for S$21 million

A WHOLLY-OWNED unit of Tat Hong Holdings has accepted an offer from JTC Corporation for the surrender of its lease of 11 Gul Crescent for a total cash consideration of S$21 million, the group said in a Singapore Exchange filing on Monday.

Tat Hong HeavyEquipment decided to surrender the lease to JTC because the Gul Crescent property had become "redundant", Tat Hong Holdings said in its statement.

The property had a net book value of about S$11.4 million as at Jan 31, 2016, and the group will recognise a pre-tax gain on disposal of around S$9.5 million, it added.

It said that it had announced in September 2013 its decision to divest the property as part of its "programme to optimise operations in land-scarce Singapore" but "offers received at that time were not acceptable to the company and the property was withdrawn from the market".

And in May 2015, another company called Mini Environment Service exercised an option to purchase the property but the sale was not completed as certain conditions were not fulfilled, Tat Hong added.

"The company had in the meantime proceeded with its plans to optimise its Singapore operations and relocated its crane storage and maintenance operations to other sites at Tuas Bay Drive, Tuas South as well as Kulaijaya, Johor, and the property is now redundant."

The Gul Crescent property, which has a site area of about 29,390 square metres, has a remaining lease of approximately 25 years, it noted.

Tat Hong shares rose 1.5 Singapore cents to S$0.43 on Monday before the announcement.