Keppel Land, a wholly-owned subsidiary of Keppel Corporation, is divesting 100% of its shares in Shanghai Fengwo Apartment Management Co Ltd (Shanghai Fengwo) to Shanghai Jindi Jinli Industry Development Co Ltd (the buyer) for a total consideration of RMB783 million ($151 million).
The divestment was made through Keppel Land’s indirect wholly-owned subsidiary, Gadius.
Shanghai Fengwo owns 100% of the equity interest in Taicang Xinwu Business Consulting Co Ltd. The latter, in turn, owns 15% of the equity interest in Taicang Zhuchong Business Consulting Co Ltd. Taicang Zhuchong indirectly owns Upview, an 8.4-hectare residential project in Shanghai’s Jiading district.
The planned divestment is said to be in line with Keppel’s Vision 2030 asset monetisation plans to unlock capital, which will be used for new growth opportunities.
Of the full amount, RMB121 million will be paid as consideration for the equity interest in Shanghai Fengwo while RMB662 million will be paid to a related company of Gadius as repayment for debts of Shanghai Fengwo and Taicang Xinwu. The debts will be assumed by the buyer.
The consideration will be paid fully in cash once the regulatory authorities have approved of the cross-border remittance of the consideration to Gadius’ designated offshore bank account. The debt repayment is payable on Dec 19.
According to Keppel, the consideration was arrived at on a willing-buyer willing-seller basis. The amount took into account several factors including the site’s location, prevailing market considerations, as well as the adjusted net asset value (NAV) based on the agreed value of the site attributable to the shares sold.
Upon the completion of the divestment, which is slated to take place by the end of 2022, Keppel Land would have had an estimated gain on disposal of RMB135 million. Once the divestment has been completed, Shanghai Fengwo and Taicang Xinwu will no longer be subsidiaries of Keppel Corporation.
The divestment is not expected to have any material impact on Keppel Corporation’s net tangible assets (NTA) per share or earnings per share (EPS) for the current financial year.
Shares in Keppel Corporation closed 2 cents lower or 0.27% down at $7.31 on Dec 19.
