Chip Eng Seng pulls plans for joint investment in Chinese private home project

MAINBOARD-LISTED Chip Eng Seng Corp's planned joint investment in the Chinese city of Taicang has fallen through, as some of the conditions precedent were not met by the long-stop date, the property group disclosed in a bourse filing.

Under the deal agreement, the company was to have chipped in 153 million yuan (S$30.6 million) to take a 51-per-cent stake in a private home project by a Chinese company that had run up debts.

But the board said that neither Chip Eng Seng nor investment partner Haiyi Shantou Investment Group had put in any funds before the agreement was terminated on Friday.

The termination of the investment will not have a significant impact on Chip Eng Seng's net tangible assets and earnings per share for the year to Dec 31, the board added.

Haiyi Investment, which would have owned 29 per cent of the project, is an interested person of Chip Eng Seng, as it is an associate of controlling shareholders Gordon and Celine Tang. Mrs Tang is also Chip Eng Seng's non-executive chairman and a non-independent director.

The conditions precedent for the axed deal included the project company preparing a detailed debt-repayment plan and reaching both settlement agreements with its creditors, as well as a shareholders' agreement with the planned investors.

Chip Eng Seng shares closed at S$0.49 on Friday, before the announcement.