Keppel Land China to divest Nanjing development associate for 1.75 billion yuan

KEPPEL Land's Chinese unit is divesting the associate company behind its first project in the eastern city of Nanjing, for 1.75 billion yuan (S$375.5 million), mainboard-listed parent Keppel Corp BN4 announced in a bourse filing on Monday (Dec 6).

The deal is expected to yield a divestment gain of 284 million yuan for Keppel Land China in the financial year, not counting previously recognised gains of some 44 million yuan for unit sales.

Keppel Land China is selling its entire 40 per cent stake in Nanjing Jinsheng Real Estate Development Co - which owns 8.8-hectare residential development China Chic - to two subsidiaries of development project partner Gemdale Corp.

The China Chic project was completed in Nov 2021 and all 1,589 homes and 27 shops have been fully sold, with only car park lots remaining in the inventory.

The divestment would have raised Keppel Corp's net tangible asset per share from S$5.02 to S$5.05 had the deal gone through on Dec 1, 2020, while the company's loss per share for FY2020 would have been pared from 27.8 Singapore cents to 24.9 cents if it were completed on Jan 1, 2020, Keppel added, in disclosing the pro forma financial effects of the transaction.

"The divestment of our stake in Nanjing Jinsheng would allow us to recycle capital more quickly to seize new opportunities," Ben Lee, chief operating officer of Keppel Land and president of Keppel Land China, said in a statement.

"We look forward to further collaboration with Gemdale and other like-minded partners to continue investing strategically in China, which is a key market for Keppel Land."

The completion of the divestment, where the value was reached on a willing buyer, willing seller basis, is expected to take place by the first quarter of 2022.

Keppel shares closed on Monday at S$5.13, up by S$0.02 or 0.39 per cent, before the news.