Ocean Sky: Buying Melbourne office block will not change risk profile

CATALIST-LISTED construction and property firm Ocean Sky International on Thursday said that its A$21.8 million (S$20.4 million) acquisition of an office building in Melbourne would not materially change the group's risk profile.

Although the property's sale price represents around 39 per cent of the group's net asset value of S$52.1 million as at Sept 30, the acquisition does not have any impact on the net asset value of the group, Ocean Sky said in response to Singapore Exchange (SGX) queries.

It added that the acquisition is accretive due to the property's expected net income yield of 5.49 per cent.

Assuming 60 per cent of the acquisition is financed with bank borrowings, Ocean Sky said it would still have about S$14 million in cash and cash equivalents. Furthermore, the group's net gearing ratio as at Sept 30 would stand at just around 0.22 times.

In response to why the deal does not require shareholder approval, the group said that the acquisition is part of its ordinary course of business to expand its property investment business into the Asia-Pacific region.

It added that the acquisition will enhance its portfolio of investment properties and provide another source of recurring rental income.

Ocean Sky shares ended flat at S$0.05 on Thursday.