BRC Asia has accepted a binding offer made by E Street Capital on Dec 29, 2023, to sell all of the 1.7 million ordinary shares it owns in Pristine Islands Investment. The offer by E Street Capital also includes the assignment of all of the shareholders’ loans that were extended by BRC Asia BEC to Pristine.
Under the terms of the offer, E Street Capital will pay BRC Asia US$1.3 million ($1.8 million) for the shares and US$12.7 million for the sale loan.
Pristine Islands is a company incorporated in Singapore in 2023. It is mainly in the business of investment holding. The company owns a subsidiary incorporated in the Republic of Maldives, which in turn undertakes hotel and resort operations and airport management in the Maldives. The company was established to undertake the expansion, development and operation of a domestic airport, a tourist hotel and a tourist resort.
As at Jan 2, Pristine has a total paid-up capital of US$10.0 million. BRC Asia’s stake represents 17.0% of the total number of shares in Pristine. The remaining shares are held by Keong Hong Construction Pte Ltd (KHC), Sansui Holding Pte. Ltd. and L3 Development Pte. Ltd., with shareholding interests of 49.0%, 17.0% and 17.0% in Pristine, respectively.
As at the FY2023 ended Sept 30, 2023, Pristine’s book value and net tangible assets (NTA) stood at a negative US$72.8 million. The net loss attributable to Pristine was US$10.8 million. Based on a valuation report commissioned by BRC Asia dated Dec 21, 2023, the market value of the 100% equity interest in Pristine and its subsidiary is nil as at Sept 30, 2023. This is due to the market value of Pristine’s total assets being less than the market value of its total liabilities.
According to BRC Asia, there are potential disputes among Pristine’s shareholders and its management in relation to the parties’ obligations under the shareholders’ agreement as well as the s construction and management of the projects. In the event these discussions do not result in the resolution of the potential disputes, BRC Asia may have to consider formal legal proceedings to pursue its claims.
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The transaction constitutes as an interested person transaction (IPT) as E Street Capital’s sole shareholder and director is Darrell Lim Chee Lek, who is also a non-executive and non-independent director of BRC Asia.
Shares in BRC Asia closed at $1.79 on Dec 29, 2023.
