Harvey Norman operator Ossia sets up new unit; buys leasehold property, Global Ten Realty

[SINGAPORE] Harvey Norman operator Ossia on Wednesday (Dec 10) said it set up a new special purpose vehicle, Ossia Capital, to hold its property investment entities.

Ossia Capital in turn established a property investment unit, OSA 1, which will buy a leasehold property at 21 Tan Quee Lan for S$14 million from Santa Grand Investments.

Ossia Capital will also acquire all of privately owned Global Ten Realty (GTR) for S$5.5 million from Messrs Eastern Garden Development, Siah Seng Koon, Ng Cheng Lock and Siah Siew Keok.

GTR, which lets self-owned or leased real estate property, owns a leasehold property at 10 Bussorah Street.

Ossia said the acquisitions will “generate stable cash flows” and “create long-term value”, given rental yield exceeds fixed deposit rates.

“The investment strategy allows the company to deploy excess cash optimally, and this strategic move aligns with the company’s commitment to delivering sustained value creation for the shareholders of the group,” it added.

Ossia said it does not believe the moves will result in a “significant change” to its risk profile as the proposed acquisitions are investments in physical property assets.

Both purchases will be funded through a combination of internal resources and bank financing.

The acquired property at two units on the ground floor of 21 Tan Quee Lan has a tenure of 999 years, which commenced in January 1827. It has an area of 271 square metres and its purchase is set to be completed on Mar 4 next year.

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GTR-owned 10 Bussorah Street has a tenure of 99 years, which commenced in December 2003.

The letting company’s unaudited net tangible asset value was about S$240,000 as at Sep 30. Its net loss after tax for the financial year was about S$38,473.

Ossia said the incorporation of both the new subsidiaries is not expected to have any material impact on the net tangible assets per share or earnings per share of the company for the current financial year.

If the acquisitions had been completed on Jun 30, the gearing ratio would have increased from zero to about 23.8 per cent, with total borrowings of S$15.6 million.

In May, the controlling shareholders of the mainboard-listed company made an unconditional offer to take the lifestyle products retailer and distributor private at S$0.16 a share.

Shares of Ossia ended flat at S$0.179 on Wednesday before the announcement.