STAMFORD Land has responded to the Singapore Exchange Regulation (SGX RegCo) on its proposed disposal of Stamford Plaza Auckland and the business of SPAK, as well as the inability to seek shareholders’ approval prior to the proposed disposal.

SGX RegCo had queried the company on the differences between the excess book value and expected net gain of disposing Stamford Plaza Auckland and SPAK.

Its response was that the S$74.4 million was the excess of the property sale price over the book value of S$48.5 million, while the expected net gain of S$50 million was after deducting expenses related to the disposal, such as professional fees, agent commissions and taxes. As for the SPAK business disposal, the S$14.5 million was the excess of the book value of S$18,000, and the S$10 million was the expected net gain after deducting professional fees, agent commissions and taxes.

“Taking into account the company’s confidentiality obligations and the commercial sensitivity of the information requested, the company will not be disclosing the details of the fees incurred by the company in connection with the proposed transactions, save to say that these fees are paid to third parties not related to the board or the controlling shareholders,” said Stamford Land : H07 0% in a bourse filing on Wednesday (Oct 19).

As for why it was unable to seek shareholders’ approval prior to the proposed disposal, Stamford Land reiterated that it wasn’t a bidding process, but a buyer who had expressed interest in acquiring the property. The agreement with the buyer was that the disposal was not subject to shareholders’ approval.

The company also referred to its reasons set out in the waiver application, that it was not a core asset of the business, nor was it used as security for financing, and that the transactions were commercially and time-sensitive. Both parties had agreed to enter into a definitive agreement on or about Sep 28, with the buyer confirming they were proceeding with the transaction on Sep 19.

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The company will be reallocating its rights proceeds to Stamford Plaza Brisbane, Stamford Grand Adelaide and Stamford Plaza Melbourne after the disposal of Sir Stamford at Circular Quay. As construction costs have spiked due to inflation, supply chain delays, constraints and bottlenecks, coupled with high labour costs, the refurbishment of Stamford Plaza Melbourne and Stamford Grand Adelaide has been delayed until costs moderate.

Currently, there has been no material utilisation of the rights proceeds. Stamford Land is not able to provide an updated timeline on the use of the rights proceeds, and will make announcements when there is material use or deviation from the stated use of the proceeds and the reason for the deviation.

SGX RegCo also queried the company on how the disposals of Stamford Plaza Auckland and Sir Stamford at Circular Quay were in line with their Jan 6, 2022 statement, which noted “the exploration of the proposed diversification of these assets has effectively ceased”. Stamford Land’s response was that the statement was read in context with the possibility of divestment of part of its portfolio of properties and moving to an asset-light strategy for its hospitality assets.

The company said it may continue to receive unsolicited offers for its hospitality portfolio, which was what had happened with the disposals.

Shares of Stamford Land closed unchanged at S$0.365 on Wednesday.