SingHaiyi Group, Chip Eng Seng Corporation and KSH Holdings have successfully made a $260 million offer for the enbloc acquisition of Park View Mansions.
The offer was made jointly by Sing-Haiyi Pearl, which is 50%-owned each by SingHaiyi Group and Haiyi Holdings; Chip Eng Seng’s wholly-owned subsidiary CEL Development; and KSH’s indirect 66.7%-owned associated company, TK 189 Development. Ho Lee Group holds the remaining one-third stake in TK 189 Development.
The tender was awarded on July 28.
Park View Mansions was launched for collective sale by public tender on June 20 with an asking price of $260 million.
The 160-unit condominium has a 99-year leasehold tenure starting from Oct 1, 1976. It sits on a land site of about 17,834.8 sq m located along Yuan Ching Road in Jurong, adjacent to the Jurong Lake Gardens.
The maximum permissible gross floor area (GFA) based on the permissible plot ratio of 2.1 is 37,453.08 sq m.
The acquisition will be completed after several conditions are fulfilled. This includes the written consent of 100% of the subsidiary proprietors of the units and a written approval from the President of Singapore (who is the head lessor) and the Jurong Town Corporation (the intermediate lessor) among others.
According to filings by both Chip Eng Seng and KSH Holding, the companies are “mindful” that the current macroeconomic factors such as rising interest and inflation rates and geopolitical tensions may present “prolonged challenges” to property developers in Singapore.
The challenges cited include delays in construction works due to a shortage of workers and disruptions in the delivery of building supplies, higher costs in the event of such delays, and more.
Yet, the filings explain that the tender was made with “familiar parties” with whom the groups have “forged good working relationships” through its past and ongoing development projects.
Chip Eng Seng, Sing-Haiyi, KSH Holdings and Ho Lee are partners in the joint offer for the en bloc acquisition of Peace Centre / Peace Mansion.
Proposed joint venture
Following the successful joint tender, the companies will form a joint venture (JV) and enter into a joint venture agreement (JVA) to set out the terms pertaining to their joint acquisition.
The companies have entered into a binding memorandum of understanding (MOU), where Chip Eng Seng’s CEL Development will hold a 40% stake in the JV. Sing-Haiyi Pearl and TK 189 will hold a 30% interest each in the JV.
Under the JVA, the joint tenderers will pay for the property’s purchase price and cover any other costs in relation to the acquisition in their respective participation proportions.
As at July 28, the companies have paid a tender fee of $100,000 in their respective participation proportions. The fee will form part of the property’s purchase price.
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CEL’s proportionate contribution of $40,000 to the payment of the tender fee was funded from internal cash sources. The company will also fund its contributions into the JV from internal cash sources.
Interested person transaction
Gordon Tang and his wife Celine Tang are the ultimate shareholders of SingHaiyi, Haiyi Holdings and Sing-Haiyi Pearl. The couple are also the controlling shareholders of Chip Eng Seng. Sing-Haiyi Pearl is thus considered the Tangs’ associate and the participation by CEL and Sing-Haiyi Pearl in the JV constitutes an interested person transaction of Chip Eng Seng.
As at July 28, the current total of all interested person transactions with the Tangs and their associates for the FY2022 ending Dec 31 is around $196.78 million.
Shares in Chip Eng Seng and KSH Holdings closed at 62.5 cents and 35 cents on July 27 respectively.
