SPH unit takes out £205m loan to repay partially borrowings for UK acquisition

THE trustee of Straits Capitol Trust (SCT) has entered into a facility agreement with OCBC Bank and Standard Chartered Bank (Singapore) for a four-year £205 million (S$354.7 million) secured term loan, the Singapore Press Holdings (SPH) said in an exchange filing late on Monday night.

SPH wholly owns Times Properties, which is the sole unitholder of Straits Capitol Trust.

The loan will be secured, among other things, by way of property mortgages against the purpose-built student accommodation portfolio comprising 20 assets in the United Kingdom, and a corporate guarantee from SPH.

Proceeds from this facility will be used to repay partially the existing loan from Times Properties to finance the acquisition costs of the UK student accommodation portfolio, said SPH, which publishes The Business Times.

In April, SPH added £133.7 million worth of assets to that UK portfolio, increasing it by 1,243 beds to 5,059 across 20 assets in 10 cities.

Under the facility agreement announced on Monday, SPH, the sponsor of SCT, is required to directly or indirectly own 51 per cent of the units in SCT and also 51 per cent of SCT's manager, Straits CM. In the event that these conditions are breached, the lenders will be entitled to require a repayment of the entire loan.

SPH said the transactions have no material impact on its earnings per share or net tangible assets of for the financial year ending Aug 31, 2019.

The company disclosed that one of its directors, Bahren Shaari, is also a director and chief executive officer of the Bank of Singapore, an OCBC subsidiary. Other than that, none of the SPH directors has any direct or indirect interest in the transactions.

Separately, SPH last week priced its S$150 million subordinated perpetual notes at a distribution rate of 4.5 per cent. The net proceeds will be used for general working capital, capital expenditure, corporate requirements and/or refinancing existing borrowings.

Shares of SPH closed down three Singapore cents or 1.28 per cent on Monday at S$2.31.