Construction company Low Keng Huat has, on June 11, entered into a share purchase agreement (SPA) with Sun Venture Homes to dispose its entire stake amounting to 40% in each of Westgate Tower and Westgate Commercial’s total issued and paid-up share capital for a total consideration of $97.1 million.
The consideration includes shareholders’ loans of a total of $80.5 million owed to the company.
On the same day, Low Keng Huat announced that it has acquired 45% of the total issued and paid-up share capital of Paya Lebar Square through an SPA with Sun Venture Realty for a consideration of $90.5 million, including a shareholder’s loan of $47.6 million owed to Sun Venture Realty.
The consideration for each transaction was based on arm’s length negotiations and was arrived at after taking into account, amongst other factors, the agreed property value of $360 million for Paya Lebar Square, $310 million for Westgate Commercial and $300 million for Westgate Tower.
Following the completion of the proposed transactions, Paya Lebar Square will become a wholly-owned subsidiary of the company.
The company will also cease to hold any shares in Westgate Tower and Westgate Commercial.
Paya Lebar Square has an issued and paid-up capital of $1 million comprising 1 million shares. It owns 159 retail units and one office unit in a commercial office and retail development at 60 Paya Lebar Road.
Each of Westgate Tower and Westgate Commercial also has issued and paid-up share capitals of $1 million comprising 1 million shares.
The Westgate group collectively owns 295 office units at 1 Gateway Drive.
Once the transactions are completed, Low Keng Huat and Sun Venture Companies will enter into a set-off agreement where the total consideration for Paya Lebar Square will be set-off against the consideration for the Westgate properties.
In the event that the consideration for Paya Lebar Square exceeds the consideration for the Westgate properties, the consideration for the former will be fully set-off, and Low Keng Huat will pay the difference to Sun Venture Realty, and vice versa.
Shares in Low Keng Huat closed 0.5 cent higher or 1.1% up at 46.5 cents on June 11.
Photo: Low Keng Huat