Extended deadline for Lian Beng to sell assets that compete with its unit SLB

Singapore

CATALIST property player SLB Development has obtained regulatory approval for its controlling shareholder Lian Beng Group to be given a one-year extension to dispose of competing business in Australia and Singapore.

SLB in a regulatory filing on Thursday announced that unfavourable property market conditions Down Under and in the city-state have resulted in its parent company, Lian Beng, not being able to divest competing business by April this year. The deadline was a year from SLB's Catalist debut in April 2018.

Last year, Lian Beng in a bid to mitigate potential conflict of interest with SLB, offered to dispose of three properties in Australia, as well as to wind up or liquidate two companies.

However, Singapore and Australia separately saw their property markets hit by cooling measures including tighter borrowing limits implemented in recent times to rein in property "euphoria". Consequently, Lian Beng was unsuccessful in divesting two of the properties in Australia and its 25 per cent stake in a special-purpose vehicle which holds some unsold condominium units in Singapore.

"None of the offers developed into binding agreements for sale as the parties were unable to agree on the commercial terms of sale," SLB said.

Further, as Lian Beng holds a minority interest of 30 per cent or less in the properties, it has to depend on its majority joint venture partners to assist in the sale of the properties.

The Singapore Exchange has agreed to afford Lian Beng an extension to divest the properties provided that some conditions are satisfied.

To these, SLB noted that Lian Beng has developed an action plan to sell the properties or its stakes in the vehicles that own the properties by the extended deadline of Apr 19, 2020.

According to the statement, Lian Beng is "cautiously optimistic" that the recent removal of certain lending restrictions in Australia in January, the Australian property market will see a recovery, thereby increasing the chances of the properties being sold.

Further, SLB's management will update its audit committee quarterly on the status of the disposal.

Should Lian Beng's Australian properties - both in Brisbane - undergo development before they are divested, the first right of refusal will be granted to SLB to purchase Lian Beng's stakes in the special-purpose vehicles that own these properties so that the property development activities will be undertaken by SLB.

Audit committee of SLB, after taking into account of the reasons for Lian Beng's request for time extension and the measures to monitor the sale, is of the view that the extension is "not prejudicial" to SLB nor its minority shareholders.