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Sakae says HY2020 fair-value dive due to partial returns of equity investments

PARTIAL returns of equity investments in two companies resulted in a significant decrease in fair value of those investments in Sakae Holdings' latest financial results for the half-year ended Dec 31, the company said on Tuesday in response to queries from the Singapore Exchange Securities Trading (SGX-ST).

The SGX-ST noted that the company's "equity investments at fair value through profit or loss" decreased to S$2.3 million as at Dec 31, 2019, versus S$10.5 million on June 30, and asked Sakae to disclose what the equity investments are and why the fair value decreased significantly in HY2020.

It also asked Sakae to disclose what the S$8.1 million of "proceeds from liquidation of equity investments at FVTPL" referred to for the six months ended Dec 31.

Sakae said that the S$8.1 million was a net return related to the partial return of capital from its investments in Griffin Real Estate Investment Holdings (GREIH) and Gryphon Capital Management (GCM).

At the group level, about S$6.8 million of the returns were offset against the investment in GREIH and GCM, while at the company level, the remaining S$1.35 million was recognised as gain on liquidation of investments and subsequently eliminated at the group level. This resulted in the reduction of the group's equity investment fair value to S$2.3 million from S$10.5 million previously.

Sakae shares last traded flat at S$0.08 on Feb 11.