Hot stock: Wee Hur rises more than 8% on divestment in student accommodation fund
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Janice Lim
LESS than an hour after the Singapore stock market opened for trading on Friday (Apr 22), shares of Wee Hur Holdings soared after it announced that it was selling a 9.9 per cent stake in its student accommodation fund in a deal that was 2.8 times its book value.
Shares of the property developer and builder rose 8.6 per cent or S$0.017 to S$0.215 at 9.16 am, with almost 444,000 shares changing hands.
It then pulled back from this high to trade at S$0.205 at 9.35 am, before going back up to S$0.215 just minutes later.
The last time Wee Hur was trading at S$0.215 was in June last year.
No married deals were recorded in early trade, according to ShareInvestor data.
Wee Hur announced via a bourse filing before the market opened on Friday that it will be selling its 9.9 per cent stake in Wee Hur PBSA Master Trust (WHPMT) for A$112.7 million (S$113.3 million)
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Other unitholders of WHPMT, which hold a 40 per cent stake, will also divest all of their interest in the Australian focused purpose-built student accommodation (PBSA) fund, valuing the total deal at A$567.9 million.
The deal will revalue the property trust at A$1.14 billion, which is 2.8 times of its current value on Wee Hur's books at S$403.2 million.
Based on the company's latest financials for FY2021 ending in December last year, Wee Hur's 60 per cent stake in WHPMT was valued at S$241.92 million.
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Based on its last closing price, the deal is about 6.3 times Wee Hur's market capitalisation of S$181 million.
After the completion of the deal, Wee Hur will hold a 50.1 per cent stake, while its buyer Reco Weather will own 49.9 per cent.
According to Wee Hur, Reco Weather is a Singapore-based investment holding company backed by a global institutional investor.
WHPMT's portfolio current comprises 5,662 beds across 7 student accommodation properties located in Sydney, Melbourne, Brisbane, Adelaide and Canberra.
As only 4 of the assets are operational, while the remaining 3 are to be completed before the end of 2023, the transaction is to be completed over 3 stages of settlement depending on when the properties will be completed.
Wee Hur's executive chairmain Goh Yeow Lian said: “We are extremely pleased to have done a recapitalisation of our first Australia focused PBSA fund, providing exit certainty for our investors within the fund term and providing a war chest for the group from the partial recycling of capital should further investment opportunities arise."
The deal is slated to be completed before Jan 1, 2024.
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