Far East Group to sell Lavender Street property for S$27m

INDUSTRIAL refrigeration systems and products distributor Far East Group is intending to dispose its Lavender Street property for about S$27 million.

In a late Friday announcement on the Singapore Exchange, Far East said that it has issued a conditional option to purchase agreement to Chang Hua Construction, an independent and unrelated third party.

Far East said that based on a Jan 17 valuation report by SRX Valuations, the current market value of the site is S$22.4 million.

The four-storey building situated at 112 Lavender Street is a freehold estate and serves as the regional headquarters of the group's operations.

It has a net book value of S$4.2 million as at Dec 31, 2017, and occupies a land area of about 1,936 square metres.

The net proceeds from the proposed disposal of about S$26.2 million will be utilised for working capital, business expansion and future investment opportunities, the company said.

The proposed disposal will be fully satisfied in cash.

Assuming that the proposed disposal was completed on Dec 31, 2017, the gain on the deal or the excess of the net proceeds over the book value of the property as at Dec 31, 2017 would be about S$22 million.

An extraordinary general meeting will be held at a later date to obtain shareholders' approval for the proposed disposal.

Far East last traded on Feb 1 and closed at S$0.08.