Chip Eng Seng to acquire remaining 30% of Maldives JV for US$1.3 million

CHIP Eng Seng Corp will acquire the 30 per cent stake it does not already own in a Maldives joint-venture (JV) company for US$1.3 million, the property company announced in a Tuesday (Dec 13) bourse filing.

The JV company, CES Tropical (Maldives), owns 99 per cent of an entity that holds the leasehold interest in a lagoon located in North Male Atoll, Maldives. Chip Eng Seng plans to develop the lagoon into a five-star resort.

Under the proposed deal, CES Hotels (Maldives) (CESHM), a wholly-owned unit of Chip Eng Seng, will buy the 30 per cent stake in CES Tropical from the seller, Tropical Developments. CESHM will also take over, for cash, the shareholder’s loans granted by Tropical Developments to CES Tropical of US$3 million.

With the deal, CES Tropical will be fully owned by Chip Eng Seng. The latter will have full control over the development of the lagoon and can manage the corporate affairs of CES Tropical more efficiently, the company said.

“The company has adequate resources (including financial) to proceed with the development of the lagoon without a joint-venture partner. Going forward, the proposed acquisition will also allow the company to account for the full share of the future value of the resort to be developed in the lagoon,” it added.

The deal is not expected to have a significant impact on Chip Eng Seng’s net tangible assets and earnings per share for the financial year ending Dec 31.

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