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IPS proposes to sell Kallang factory to StorHub for S$26m
PRINTING and software package specialist International Press Softcom (IPS) has proposed to sell its Kallang factory for S$26 million in cash to self-storage business StorHub, the Catalist-listed firm said on Wednesday.
An independent valuer had placed the property's open market value at S$35 million as at Oct 23, 2019, and the property was launched for sale that month with an indicative price of S$30 million.
IPS on Wednesday said the deal took into account prevailing market conditions, the current market prices of nearby properties and the building's net book value of about S$25.6 million as at Dec 31, 2019.
It also considered the diminishing 60-year leasehold period which began on Feb 16, 1990.
Its board said the property is under-utilised and has not been generating significant rental income. The under-utilisation would cause IPS to incur continued losses if it was not sold, it added.
IPS currently uses the building as its head office and as a logistic management hub for its warehousing and supply chain activities.
It is a six-storey factory with a land area of about 4,998 square metres (sq m) and gross floor area of roughly 12,500 sq m.
The company will use the net proceeds of about S$25.6 million for general working capital, future acquisitions and investments, and any other needs of the group that may arise.
The deal is subject to approval from shareholders at an extraordinary general meeting and from JTC.
It will complete either within 12 weeks from March 31, the day the sales and purchase agreement was signed, or within four weeks from the date of JTC's approvals, whichever is the latest.
This is if JTC does not request for an environmental baseline study of the property.
Shares of IPS were unchanged at S$0.01 as at 9.22am on Wednesday, after the announcement was made.