PropNex to sell entire stake in property management arm PPMC

REAL estate agency PropNex on Monday announced that it is looking to sell its stake in its property management arm for S$1,018,000.

PropNex Realty - along with shareholder Lawrence February Mila Manalac - entered into a sale and purchase agreement with Newman & Goh Property Consultants, to dispose its entire shareholding interest in PropNex Property Management Consultants (PPMC).

The disposal will allow the company to allocate more focus on its real estate agency business, said PropNex in its regulatory update.

PropNex Realty owns 75 per cent of the total share capital in PPMC, while Mdm February owns 25 per cent. The consideration, which will be paid in cash, was arrived at after arm's length negotiations on a willing-buyer and willing-seller basis, and was determined based on the business operations and prospects of PPMC.

The proposed divestment will be paid in two tranches. The first tranche of S$814,400 will be paid on the completion of the share transfer, while the second tranche of SS$203,600 will be paid 12 months after.

PropNex added that the second tranche payment could be adjusted based on the status and number of property management service contracts novated to the purchaser, as well as the number of new property management service contracts tendered.

A NEWSLETTER FOR YOU

Tuesday, 12 pm

Property Insights

Get an exclusive analysis of real estate and property news in Singapore and beyond.

Sign Up

The book value and the net tangible asset value attributable to the shares disposed of by the company is about S$55,000 as at Sept 30, 2020.

"There is no market value of those shares as the shares of PPMC are not publicly traded, and no independent valuation was undertaken," said PropNex.

The transaction is not expected to have any material impact on the net tangible assets per share and earnings per share of the PropNex for the financial year ending Dec 31, 2021, it said.

PropNex shares rose 0.5 Singapore cent, or 0.64 per cent, to close at 79 Singapore cents on Monday.