Keppel Land China divests Hill Crest Villas in Chengdu for 1.26b yuan
Uma Devi
KEPPEL Land China, a subsidiary of Keppel Land, is divesting its 100 per cent stake in Chengdu Hilltop Development Co Ltd for an aggregate amount of 1.26 billion yuan (S$250.4 million).
The transaction, entered into by Keppel Land China's subsidiary Hillwest Pte Ltd, is expected to earn the company a divestment gain of approximately S$43 million.
Ben Lee, president of Keppel Land China, said the company regularly reviews its portfolio of assets to seek higher returns. "We remain committed to deepening our presence in China, a key market of Keppel Land, as well as in the Chengdu metropolis, one of our focus regions in China."
The divestment is in line with Keppel Corporation's Vision 2030 and its plans to monetise assets valued at S$17.5 billion, so that funds can be channelled towards growth initiatives. The company said it will seek to unlock some S$3 billion to S$5 billion worth of these assets over the next three years.
Under the transaction terms, some 845.2 million yuan will be paid as consideration for the divestment, which is subject to completion adjustments. The remaining 414.8 million yuan is for the repayment of loans owed by Chengdu Hilltop Development to a subsidiary of Hillwest.
Keppel said Chengdu Hilltop Development was incorporated to acquire the land for the development of Hill Crest Villas in Chengdu, Sichuan province, which has completed Phase One of its development. It now comprises 53 villas and a clubhouse.
The divestment is expected to be completed in the first quarter of 2021. Following the divestment of Hill Crest Villas, Keppel Land continues to have four residential projects in Chengdu, namely Park Avenue Heights, Serenity Villas, V City and City Park.
Based on Keppel's latest audited financial statements, the divestment, if completed on or before Dec 31, 2019, would have lifted the group's earnings per share from 38.9 cents to 41.4 cents, and its net tangible asset per share from S$5.25 to S$5.27.
Shares of Keppel Corp closed at S$4.86 on Tuesday, up 15 cents or 3.2 per cent.
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