Frasers Property subsidiary inks JV agreement to explore land projects in China

FRASERS Property subsidiary Suzhou Sing Heng Le Enterprise Development has inked a strategic alliance agreement with its joint venture partner and its related entity to potentially invest in certain land plots in China.

Under the agreement, Suzhou Sing Heng Le will be funding 1.8 billion yuan (S$394.41 million) to cover the costs of the proposed investment, said the property developer in a bourse filing early on Monday (Mar 28).

Another wholly-owned subsidiary Singlong Property Development (Suzhou) will be lending one of the joint venture partners involved in the proposed development a bridging loan of 1.2 billion yuan (S$257.16 million), which can only be used to pay for the project.

If it does materialise, the companies will set up joint ventures that will own and develop the land plots.

Suzhou Sing Heng Le will also acquire indirect interest of up to 25 per cent in each of the joint ventures.

Otherwise, the company will be entitled to a full refund of the amount that has been paid, unless another arrangement of how these funds would be used have been agreed on by the parties involved.

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As for the loan provided by Singlong, the total amount of 1.2 billion yuan will be provided up till July 1, 2022, with an interest rate of 8 per cent per annum.

Based on its projections, TQ5 : TQ5 0%estimates that the profit attributable to shareholders would decline by 2.1 per cent to S$759 million from S$775 million, after the company disburses the total investment amounting to about 3 billion yuan (S$651.57 million) through its two subsidiaries.

The earnings per share would also drop to 22.1 Singapore cents, from 22.6 cents.

The net tangible assets amounting to S$8.8 billion remain unchanged.

Shares in Frasers Property ended trading at S$1.09 on Monday, up S$0.01 or 0.93 per cent.

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