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KOP to book net proceeds of $79.2 million following ruling to transfer Shanghai project to local partners

The Edge Singapore
The Edge Singapore10/5/2022 12:01 AM GMT+08  • 2 min read
KOP to book net proceeds of $79.2 million following ruling to transfer Shanghai project to local partners
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KOP is to transfer its 30% stake in its key Shanghai winter land theme development to its two joint venture partners, following a ruling by a local arbitration court. The company expects to book net proceeds of $79.15 million upon completion of the transaction.

KOP had been in arbitration with these two partners since Jan last year.

The two partners are Shanghai LuJiaZui Zhi Mao Investment Co and Shanghai Harbour City Development (Group). They are to pay KOP RMB326 million and RMB244.5 million respectively.

KOP, in turn, will receive net proceeds of some RMB404.6 million after deducting early termination fees, legal costs, and other associated fees.

KOP’s board is “of the view that the final arbitration judgement have a positive impact on the company despite the fact that the company is made to terminate the agreements and dispose of the equity interests in the joint venture and pay damages and contribute to the cost of the arbitration,” the company states.

Prior to this ruling, KOP had already injected some RMB300 million into the project.

See also: OCBC opens 20,000 sq ft lifestyle and banking space at Wisma Atria, its second-largest after OCBC Centre

KOP says the disposal will generate a healthy cash inflow which enables the group to substantially reduce its liabilities by repaying all the shareholders’ loans and have a significant interest cost saving.

KOP estimates that net proceeds of the disposal after deducting all the expenses and expected taxes will be approximately RMB 394.1 million, or some $79.2 million.

The company plans to use the net proceeds for general working capital, repayment of shareholders’ loans and for expansion into other new opportunities which may result in higher value to the shareholders.

KOP shares last traded at 7.3 cents, up 4.29% year to date.

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