Keppel divests 35% stake in Chengdu project for 504 million yuan; acquires Pierfront Capital
KEPPEL Corporation has entered into an agreement with Vanke (Chengdu) Enterprise to divest its 35 per cent stake in their joint venture (JV), which owns a residential project in Chengdu.
The shares will be sold to the Chinese developer, and the move is in line with Keppel’s asset monetisation plans to unlock value from “lumpy development profits” to more recurring income, said the company on Monday (Oct 2).
Vanke will pay a cash consideration of about 504 million yuan (S$94 million) in a single tranche no later than Oct 31, Keppel added.
The consideration amount took into account the JV sale shares’ audited book value and adjusted net asset value of approximately S$99 million as at Jun 30.
The group noted that all 5,399 residential units and 356 street-front shops of the JV’s residential project V City, which was completed in 2020, have been fully sold. The remaining inventory comprises carpark lots and a market.
The cumulative profits after tax from the sales of residential units, street-front shops and other amenities at V City reached S$57 million, prior to the divestment.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
The divestment is expected to be completed within the fourth quarter of 2023.
The group’s real estate division has monetised over S$3 billion of assets in China since 2017, and recognised profits of more than S$1 billion.
In a separate announcement on Monday, Keppel said it acquired the remaining 50 per cent interest in Pierfront Capital Fund Management from Clifford Capital.
In addition to the 50 per cent stake acquired in 2020, Keppel now wholly owns Pierfront Capital, a private credit financing solution provider in real asset sectors.
But the group is unable to disclose the consideration amount, it told The Business Times.
Christina Tan, chief executive officer of fund management and chief investment officer of Keppel Corporation, highlighted that the company is confident in the promising long-term growth potential of the private credit asset class, especially in today’s volatile economic landscape and tight credit markets.
“We are enthusiastic about opportunities in the Asia-Pacific region, where we see a growing number of companies seeking specialised intermediate capital solutions,” she added.
Both the divestment in the Chengdu project and the acquisition of Pierfront Capital are not expected to have any material impact on the earnings per share and net tangible assets per share of Keppel for the current financial year.
Shares of Keppel were trading down 0.4 per cent or S$0.03 at S$6.77 as at 2.06 pm on Monday.
Copyright SPH Media. All rights reserved.
