Aspial Corp, Koh family-linked entity move to privatise AF Global for S$31.8 million as it sells stake in Knight Frank Singapore
The offeror, AFG Investment, is looking to acquire a 27.35% stake in the mainboard-listed hospitality player for S$0.11 per share
[SINGAPORE] A consortium comprising jewellery retailer Aspial Corp and an entity linked to the Koh family behind it has launched a bid to privatise hospitality player AF Global .
Aspial and JK Global Investment – the Koh family-linked entity – are proposing to buy the remaining shares of mainboard-listed AF Global that they do not already control. The acquisition will be made through AFG Investment, a special-purpose vehicle incorporated by the consortium, said Aspial in a bourse filing on Wednesday (Oct 8).
AFG Investment, the offeror, is looking to acquire some 288.7 million shares or a 27.35 per cent stake in AF Global for S$0.11 per share, or a total consideration of around S$31.8 million.
Aspial, whose business covers jewellery retail, pawnbroking and real estate, owns a 41.75 per cent stake in AF Global, the subsidiaries of which own and operate hotels and serviced residences. Another 30.91 per cent of AF Global shares are held by Koh Wee Meng, the executive chairman of property developer Fragrance Group and brother of Koh Wee Seng, who also helms Aspial.
Aspial said that the privatisation will offer greater flexibility to manage AF Global and optimise capital resources without the costs and regulatory restrictions associated with a listing on the Singapore Exchange (SGX).
It pointed out that AF Global’s listing status serves “limited purpose” as the group has not tapped the equity markets to raise funds since 2010 and is unlikely to do so. Despite this, it continues to incur costs associated with being listed.
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Aspial said: “The offeror is of the view that AF Global is unlikely to require access to Singapore equity capital markets to finance its operations in the foreseeable future. Accordingly, the offeror does not believe it is necessary for AF Global to maintain a listing on the SGX.”
AF Global was incorporated and listed on the SGX mainboard in 1973.
The proposed acquisition is conditional upon certain conditions, such as the approval of shareholders representing at least three-fourths of the value of scheme shares.
Proposed sale of Knight Frank Singapore stake for S$36.9 million
In a separate announcement on Wednesday, AF Global said it plans to sell its entire interest in Knight Frank Singapore, in which it holds a 55 per cent stake, for a consideration of S$36.9 million.
The buyer, Knight Frank Asia Pacific, is a subsidiary of London-based real estate consultancy Knight Frank and holds the remaining 45 per cent stake.
AF Global noted that Knight Frank Singapore, a legacy investment from its previous controlling shareholder, provides professional services that are unrelated to its main hospitality sector business – under which it operates a hotel in Thailand and two serviced residences in Vietnam and Laos.
“The proposed disposal therefore provides the company with a definitive exit from such a legacy investment together with the opportunity to monetise its investment in Knight Frank Singapore at a gain to its book value,” AF Global said.
The company added that the transaction will strengthen its financial position, although it is currently unable to say how exactly the proceeds will be used.
The sale is conditional upon approval of AF Global shareholders.
Aspial and Koh Wee Meng hold around 72.6 per cent of the company’s voting rights and have entered into irrevocable undertakings with it to vote in favour of the deal at an upcoming extraordinary general meeting.
Shares of Aspial closed flat Monday at S$0.103 before the company on Tuesday morning called for a trading halt, which has been lifted; AF Global shares closed Tuesday flat at S$0.096 before the group requested a trading halt on Wednesday morning.
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