SINGAPORE (July 2): Chip Eng Seng says that its newly incorporated wholly-owned subsidiary is acquiring a property located at 51 Pirie Street in Adelaide, Australia for A$14.5 million ($14.6 million).

The vendor of the property is Pirie Investments (Aust), in which Director and Group CEO of Raymond Chia Lee Meng has an effective stake of 40%. Hence, the vendor is an associate of Chia and the acquisition constitutes an “interested person transaction”.

On Jan 28, 2016, Chip Eng Seng entered into a non-binding letter of intent with Chia for the purposes of evaluating and entering into discussions for the proposed acquisition by the group of all or part of two projects in Adelaide which Raymond Chia Lee Meng's own property development business is involved in. In connection with the agreement, Chia was appointed to his current position in May 2016.

For the proposed acquisition, Chia has abstained from the board's review and approval process.

The property has a land size of 1,283 sqm and currently has a vacant office building situated on it.

The group plans to demolish the building and redevelop it into a hotel development.

The acquisition will be funded through internal resources.

Shares in Chip Eng Seng closed at 84 cents on Monday.