Singapore (Jan 3): Kim Heng Offshore & Marine Holdings announced Friday that wholly-owned subsidiary Kim Heng Marine & Oilfield has agreed to sell its property at 48 Penjuru Road in western Singapore for $18.5 million.

This will see Kim Heng incur an impairment loss of $6.5 million, as the property has a net book value of $25.0 million as at Sept 30, 2019.

Based on a valuation by Collier International Consultancy and Valuation (Singapore) as at end-December 2019, the property has a market value of $22.0 million.

However, Kim Heng says in a filing to SGX that the sale price was the best price offered for the property.

The group says this is because the owner of the building, Jurong Town Corporation (JTC), only allowed the property to be sold to a company engaged in a business which involved the use of the waterfront, thus narrowing the pool of potential buyers.

It added that the sale price was arrived at based on arm’s length negotiations and on a willing-buyer and willing-seller basis.

The property, which sits on a site area of 19,512 sqm, comprises a purpose-built 4-storey single user warehouse with ancillary offices, an open waterfront fabrication, and a storage yard. It has a total floor area of around 13,340.5 sqm.

While the proposed sale will result in an impairment loss, Kim Heng says it is “in the best interest of the group” as it will strengthen its cash position and net gearing.

The proposed sale will also allow the group to consolidate and streamline its business operations at its remaining yard in Pandan Crescent to realise cost savings, it added.

Shares in Kim Heng closed 0.1 cent lower, or down 1.7%, at 5.8 cents on Friday, before the the announcement.