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Nam Cheong unit selling its Suntec office lots for S$25m

TROUBLED shipbuilder Nam Cheong Limited's unit is disposing of its office lots at Suntec Tower Three for S$25 million to a third party purchaser, said the company in a Singapore Exchange filing late on Thursday night.

Although the sale will be a loss on disposal, the company said that it will be in the commercial interests and benefit to the group as all proceeds from the proposed disposal will be used to settle the outstanding amount under a credit facility granted by DBS Bank Limited and secured by the Suntec property.

The office lots were initially intended to be used as the corporate office of the group but the company subsequently decided to continue to lease it to third parties to obtain rental income.

However, due to the severe and protracted downturn in the global oil and gas industry, the company has taken steps to review its options to restructure its business, operations and balance sheet to preserve the value of the company for its stakeholders, it said.