You are here
Ascott Reit divests Vietnam subsidiary for US$10m
THE manager of Ascott Residence Trust (Ascott Reit) has divested its entire shareholding interest in wholly owned subsidiary The Ascott (Vietnam) Investments and novated the shareholder's loans to an unrelated third-party purchaser for US$10 million.
In a Singapore Exchange announcement on Thursday evening, Ascott Reit's manager said the subsidiary owns 70 per cent of the issued share capital of Vietnamese project company West Lake Development Company, which in turns owns 100 per cent of a serviced residence called Somerset West Lake Hanoi. The remaining 30 per cent of the project company is held by Hanoi Housing Development and Investment Corporation.
The value of the serviced residence property as at June 30 was S$13.3 million, based on a valuation conducted by HVS using the discounted cashflow approach. The agreed property value came up to approximately S$18.5 million.
The purchase consideration of US$10 million was based on the aggregate value of the amount of the shareholder's loans to be novated to the purchaser, amounting to US$5.2 million, and the amount payable for the sale shares of The Ascott (Vietnam) Investments, amounting to US$4.8 million.
The Reit manager noted that the purchase consideration is subject to post-completion adjustments to take into account the consolidated net asset value of the target company and the amount of the shareholder's loans as at the completion date of the divestment.
The transaction is in the ordinary course of Ascott Reit's business, and is not expected to have any material effect on the net tangible assets per share and earnings per share of Ascott Reit for the current financial year.
Ascott Reit units closed down two Singapore cents or 1.43 per cent to S$1.38 before the announcement on Thursday.