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AF Global's 292.8m yuan stake sale in China JV falls through
HOSPITALITY player AF Global's proposed 292.8 million yuan (S$57.6 million) sale of a 55 per cent interest in its joint venture (JV) did not take place.
This was because the buyers - affiliates of the JV partner - had failed to procure financing for the purchase price as per the conditions precedent, the mainboard-listed firm said on Thursday night.
The long-stop date for the deal has expired, and the parties did not agree to a further extension of time.
"Despite the current situation, discussions with the JV partner on the proposed disposal are still underway," said AF Global.
At the same time, AF Global is seeking legal advice and will, in consultation with its legal advisers, determine the means to enforce the group's legal rights.
Legal enforcement in China is expected to take its due process, and the company will provide an update as and when there is any major development.
In June, AF Global announced that its wholly-owned subsidiary LC Logistics was looking to sell the stake in the property development JV, Xuzhou Yinjian LumChang Real Estate Development.
The venture is developing about 284,000 square metres of above-ground gross floor area for an integrated project comprising high-rise residences, retail, offices and a hotel in China.
Back in 2018, AF Global had said there were disputes and litigation between the group and the JV partner, Beihai Yinjian Investment (China), which affected the JV.
The proposed stake disposal thus provided a timely opportunity for the Singapore-listed firm to monetise its investment, given that there has been an "irrevocable breakdown" of both parties' working relationship, AF Global said in June.
In connection with the equity transfer framework agreement inked for the sale, LC Logistics and the buyers had also entered into a mediation agreement to withdraw their disputes and litigation save for an outstanding litigation relating to the JV's dissolution.
That outstanding matter would have been resolved once LC Logistics had received the funds from the proposed stake sale.
Shares of AF Global last traded at 7.1 Singapore cents on Thursday.