Keppel unit to divest stake in Shanghai rental operator for 783m yuan
Tessa Oh
KEPPEL Land, a subsidiary of Keppel Corporation , will be divesting its entire stake in rental apartment operator Shanghai Fengwo Apartment Management for 783 million yuan (S$151 million).
Shanghai Jindi Jinli Industry Development will be buying the stake, which is held by Gadius, an indirect wholly-owned subsidiary of Keppel Land.
Of the total transaction value of 783 million yuan, Gadius will receive a consideration of 121 million yuan, subject to completion adjustments. This will be payable in full, in cash, upon regulatory approval for remittance of the sum into Gadius’ designated offshore bank account.
The remaining 662 million yuan will be paid to a related company of Gadius, as repayment for debts of Shanghai Fengwo and Taicang Xinwu Business Consulting that have been assumed by the buyer. Shanghai Fengwo fully owns Taicang Xinwu. The debt repayment is due on Monday (Dec 19).
Taicang Xinwu owns a 15 per cent stake in Taicang Zhuchong Business Consulting, which in turn indirectly owns Upview, a 8.4 ha residential project. The site is located in Jiading, a north-western district in Shanghai.
In a bourse filing on Monday evening, Keppel said the consideration was arrived at on a “willing-buyer, willing-seller” basis. This took into account the location of the site, prevailing market conditions and the adjusted net asset value based on the agreed value of the site, which was about 121 million yuan as at Dec 12.
The group is expected to gain about 135 million yuan following the sale, which is expected to be completed by the end of this year. Shanghai Fengwo and Taicang Xinwu will no longer be its subsidiaries after the divestment.
Keppel said the sale is in line with its “Vision 2030” asset monetisation plans, to unlock capital which can be channelled towards new growth opportunities. It added that the sale is not expected to have any material impact on the net tangible assets per share or earnings per share of the company for the current financial year.
Shares of Keppel were down 0.3 per cent or S$0.02 at S$7.31 at Monday’s close, before the announcement.
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