Union Gas plans purchase of Defu Lane HQ for S$10.5m

CATALIST-LISTED Union Gas Holdings has made an offer to purchase a property at 89 Defu Lane for S$10.5 million, to serve as its headquarters, the company announced in a bourse filing on Friday. 

Union Gas paid S$105,000 to the vendor, Long Bow Manufacturing, on Friday for an option to purchase the property. Long Bow has five working days to accept the offer. The sale is also conditional on receiving approval, as well as a 30-year lease extension from JTC Corporation.

The market value of the property is about S$12 million, based on a valuation commissioned by a bank in late-2018, on the assumption that the lease period will be extended by 30 years. Union Gas will fund the purchase with internal resources, borrowings or both. 

"As the company has been operating out of offices in different locations, the potential acquisition will allow the company to centralise its staff in a single location," Union Gas said in its filing. 

Union Gas shares closed at S$0.245 on Friday, down 2 per cent.