Hot stock: Heavy trading in The Place Holdings amid talks to sell 11% stake in Realty Centre site

SHARES of The Place Holdings were heavily traded on Thursday (May 11) after the group said it is in talks to sell up to 11 per cent of New Vision Holding – the entity that owns the land and building formerly known as Realty Centre on 15 Enggor Street.

The group expects its share of the potential proceeds from the deal to be S$8.8 million, which is 13.6 per cent of the company’s entire market capitalisation of S$64.7 million as at the midday trading break.

The counter hit a near two-month high on Thursday, climbing as much as 33.3 per cent or S$0.003 to S$0.012 as at 10.22 am. This came after the property management and media company resumed share trading on Thursday morning, following a halt called on Monday.

By the midday trading break, The Place Holdings shares were trading 22.2 per cent or S$0.002 higher at S$0.011. The counter was also the most actively traded by volume at the time, with 140.8 million shares changing hands. 

On Wednesday, the group’s wholly-owned subsidiary, The Place Singapore Investment (TPSI), along with MCC Land (Singapore) and Sun Card Limited (SCL), entered into a binding indicative framework agreement with Maximus Global Ventures. All four parties will enter into a sale and purchase agreement by Jun 30.

The transaction will allow The Place Holdings to realise the value of TPSI’s 11 per cent stake in New Vision and S$8.6 million outstanding in loans extended to New Vision. This will help free up cash and resources for other business opportunities for the group, it said.

The S$8.8 million was determined based on an S$80 million valuation for New Vision. 

New Vision received an S$87 million shareholder loan from TPSI, MCC Land and SCL to finance the redevelopment of the Realty Centre site, based on their respective shareholdings. The amount outstanding now stands at S$77 million.

“The proposed transaction is also in line with the group’s strategy to focus on its digital technology businesses, considering the challenging prospects of property development and property sales in Singapore,” The Place Holdings noted.

TPSI owns a 51 per cent stake in New Vision, MCC Land holds 30 per cent and SCL holds 19 per cent. MCC Land and SCL will sell their entire stake in New Vision, while TPSI retains its remaining 40 per cent stake.

Previously, to facilitate the property’s acquisition, New Vision obtained bank borrowings from the Singapore branches of China Citic Bank and Maybank Singapore. The amount outstanding, excluding accrued interest, stands at S$109.7 million as at Thursday.

In a separate announcement on Thursday, the group said that together with New Vision, it is in discussions with the financiers for the resolution of certain technical breaches relating to the development and construction of properties on the Realty Centre site. The financiers have not recalled the outstanding loan as at Thursday, the board said.

The Place Holdings bought the office building back in 2019 for S$148 million at a 10.3 per cent discount to the property’s collective sale reserve price of S$165 million.

It also outlined plans to redevelop the freehold site into a mixed-use commercial and residential tower, with the building serving as its company’s headquarters. The land plot spans about 11,000 square feet and is zoned for commercial use with a plot ratio of 5.6.

The property is near the Tanjong Pagar MRT station on the East-West Line and the future Prince Edward station on the Circle Line.

New Vision owns the legal and beneficial title to the land and building and the remnant land.