Thakral Corp sets up venture to invest in Japan properties

Singapore

MAINBOARD-LISTED Thakral Corporation has set up a joint venture (JV) to invest in properties in Japan.

The company has incorporated new subsidiaries Thakral Umeda Properties (TUP) and Nihon Property Investments in preparation for further investments in Japan together with other investors, it said in a statement on Wednesday.

Thakral Corp and its subsidiaries have collective direct shareholdings of about 79.1 per cent in TUP.

TUP is a pooled investment JV through which the group, certain entities controlled by the Thakral family and certain third-party investors, will invest in structures established in Japan (TMK Japan), the company said.

The business of TMK Japan involves the acquisition, ownership and management of properties in Osaka.

The directors of the company believe that the JV is part of its overall strategy to "diversify its asset and earnings base in Japan to capitalise on the country's strong economic fundamentals and tourism boom, and to ultimately enhance shareholder value".

In total, TUP will issue a million shares worth 100 million yen (S$1.25 million), in denominations of 100 yen each to the shareholders in their respective proportions on/about the completion of the investment in the Japanese structures.

TMK Japan shall use the proceeds to conduct the business and distribute the net proceeds of the business either in the form of profit distribution or capital to TUP, the company said.

While the JV is considered an interested-person transaction under the Singapore Exchange listing rules, Thakral Corp's audit committee has reviewed the terms and is of the view that the risks and rewards of the JV are in proportion to the equity of each partner, and that these conditions are not prejudicial to the interests of the issuer and its minority shareholders.

None of the partners brought in have an existing equity interest in TUP prior to the group entering into the JV.

Therefore, although the value of the JV to the company upon further issue of shares on/about the completion of the investment will be more than 5 per cent of the group's latest audited net tangible assets, Thakral Corp is exempted from seeking shareholders' approval for the JV.

Shares in Thakral Corp closed at 47.5 Singapore cents on Thursday, down one per cent, or 0.5 cent.