Keppel Corporation, on Oct 26, announced that its wholly-owned subsidiary Keppel Land is divesting 100% of its equity interest in Shanghai Jinju Real Estate Development Co Ltd.
The divestment was made between Keppel Land’s subsidiary, Shanghai Maowei Investment Consulting Co Ltd, and Shanghai Dongyuan Real Estate Development (Group) Co Ltd, who will be buying over Keppel Land’s stake.
Shanghai Jinju owns Sheshan Riviera, a residential development project in Songjiang District, Shanghai, China.
In the statement released by Keppel, Shanghai Dongyuan Real Estate Development (Group) Co Ltd will acquire the sale shares from Shanghai Maowei and pay a total amount of RMB967 million ($196 million).
Of the total sum, RMB456 million will be paid to Shanghai Maowei as consideration for the sale shares. Another RMB306 million will be paid to a related company of Shanghai Maowei as repayment for loans extended to Shanghai Jinju. A final RMB205 million will be paid on behalf of Shanghai Jinju to Shanghai Maowei, being a dividend that is receivable by Shanghai Maowei from Shanghai Jinju.
The total sum of the consideration, loan repayment and dividend will be payable in cash in three instalments. Of the sum, 20% has already been paid. Another 75% will be paid upon the transfer of the sale shares while the remaining 5% is to be paid by the 4QFY2022.
The consideration was arrived at on a willing-buyer willing-seller basis factoring in the location of the site, prevailing market conditions and the adjusted net asset value based on the agreed value of the site attributable to the sale shares as at Sept 30.
The divestment is expected to be completed in the 4QFY2022.
Following the completion of the divestment, Shanghai Jinju will no longer be a subsidiary of Keppel Land.
Shares in Keppel Corp closed 1 cent higher or 0.15% up at $6.60 on Oct 26.