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Japanese property firm CRE to invest US$6.2m in Sembcorp Infra Services

JAPANESE property firm CRE Inc - through subsidiary CRE Asia - has agreed to invest US$6.2 million in Sembcorp Infra Services (SIS) in a share subscription agreement.

SIS, a subsidiary of Sembcorp's wholly-owned entity Sembcorp Development, will see its share capital enlarged to 20.51 million ordinary shares via the issuance of new ordinary shares, and CRE's holdings of some 6.15 million shares will constitute 30 per cent of the enlarged capital, with Sembcorp Development holding the other 70 per cent.

The completion of the share subscription is expected to be finalised by end-July 2018 in cash, Sembcorp said in a media statement.

The value of the new shares - US$1.008 apiece - was calculated from the projected cashflows of SIS's existing warehouse space in Vietnam.

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In addition, Sembcorp Development, SIS and CRE Asia have signed a joint venture agreement to "support Sembcorp Development's warehousing and logistics operations in the VSIP (Vietnam Singapore Industrial Park) integrated townships in Vietnam".

SIS and wholly-owned subsidiary SIS Hai Phong are the developers of 30,000 square metres of warehouse space within the VSIP integrated township in Hai Phong, Vietnam.

The new capital from CRE Asia, together with bank borrowings, will fund the development of a further 30,000 square metres of warehouse space in Vietnam.

Sembcorp Development is the co-master developer of the seven VSIP developments, which consist of total gross land area of 6,660 hectares and a manufacturing tenant base of 724 international and local companies.

"CRE's strengths in logistics tenant leasing, and the management and development of logistics properties, will complement Sembcorp Development's capabilities in industrial and warehousing property development. This strategic alliance will help to drive the expansion and growth of both companies' businesses in Vietnam," Sembcorp announced.

Sembcorp said the deal was not expected to have material impact on its earnings per share and net asset value for the financial year ended Dec 31, 2018.

Sembcorp's counter ended Wednesday trading at S$3.05 apiece, down 1.29 per cent or S$0.04.