Frasers Property proposes tie-up with JV partner involving investment, bridging loan

FRASERS Property, TQ5 : TQ5 0%through its wholly-owned subsidiary Suzhou Sing He Xiang Management Consultancy (SHX), on Thursday (Nov 25) entered into a framework agreement with an unnamed joint-venture (JV) partner and its related entity to participate in a potential investment in land.

In a bourse filing, the multinational property company said that if the deal materialises, SHX will acquire an indirect interest of up to 40 per cent in the JV. Frasers Property noted that none of the JV partners is an "interested person" of the company.

SHX will be providing funding of some 1.6 billion yuan (S$337 million) towards costs for the investment. It will also extend an interest-bearing bridging loan of some 1 billion yuan for a term of up to Apr 1, 2022, which will be utilised by the said JV partner towards payments in relation to the proposed investment. The loan bears an interest rate of 8 per cent per annum.

"The company is of the view that the provision of the proposed SHX investment amount towards the proposed investment would enable the group to form a strategic alliance with the JV partners and potentially jointly participate in other investment opportunities in the future," said Frasers Property.

Assuming the proposed investment amount had been provided for on Oct 1 last year, the earnings per share would have been lower at S$0.222 for the financial year ending Sep 30, 2021, instead of S$0.226 if there were no provisions made for the investment amount. Profit attributable to shareholders would have fallen from S$775.1 million to S$760.7 million.

If the proposed investments had been made on Sep 30, 2021, there would have been no difference to the pro forma financial impact on net tangible assets, said the company.

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On Tuesday (Nov 23), Frasers Property announced that it has cancelled plans to acquire a 75 per cent stake in Vietnam property development company Phu An Dien Real Estate Joint Stock Company. It said the conditions precedent for the completion of the proposed acquisition have not been fulfilled by the long-stop date agreed by the parties.

Shares of Frasers Property closed flat at S$1.18 on Thursday (Nov 25).

Read more: 

• Frasers Property scraps plan to acquire Vietnam property development company
• Frasers Property back in the black for H2; capital, liquidity management remain top priorities: CEO
• Frasers Property issues S$200m sustainability notes at 3%