Tuesday, 16 August 2016
PETALING JAYA: Sime Darby Bhd is proposing to acquire a controlling stake in Singapore-listed Saizen real estate investment trust (REIT) by injecting its industrial assets in Australia into the target fund for new units.
Saizen REIT is a cash trust following the disposal of its Japanese assets earlier this year.
The Malaysian conglomerate said its indirect units – Hastings Deering (Australia) Ltd and Sime Darby Property Singapore Ltd (SDPSL) – had signed a framework agreement with Japan Residential Assets Manager Ltd (JRAM) to initiate the corporate exercise.
“The proposals will enable Sime to monetise the properties, while deleveraging its balance sheet.
This will further allow Sime to reallocate capital and drive continuous improvements in financial and operational efficiency,” Sime said in a filing with Bursa Malaysia yesterday.
Under the deal, Hastings Deering will sell some of its industrial properties in Australia to Saizen REIT, which is the first REIT listed in Singapore to offer exclusive access to Japanese residential real estate, in return for new units in the latter as part of the reverse takeover of Saizen REIT by SDPSL.
Concurrently, SDPSL had entered into a conditional share purchase agreement with JRAM for the proposed acquisition of a 80% stake in JRAM.
The consideration for the JRAM acquisition shall be the aggregate of 80% of JRAM’s net assets and US$1mil (RM4.01mil). This, in turn, would be on the basis that the net assets shall in aggregate be worth between S$1mil (RM2.98mil) on the date after the EGM of Saizen REIT and S$1.1mil.
The completion of the properties disposal and the JRAM acquisition are inter-conditional, according to the statement.
“Moving forward, this REIT platform is expected to have greater flexibility in its future fund-raising exercises to build a sizeable international portfolio of assets, which Sime will benefit from its direct stake in Saizen REIT,” it added.
Most of the proceeds from the disposal were paid out to unitholders and the total cash at liquidation as at July 15 stood at 9.87 Singapore cents (29.42 sen) per unit.
According to the disclosure, completion of the properties disposal would be conditional upon, among others, completion of the distribution of up to 9.87 Singapore cents per unit to unitholders prior to the issuance of the new Saizen REIT units, and draw down of the loan to part-finance the property disposal, as well as obtaining regulatory approvals as well as approval from Sanzen REIT unitholders by Dec 31, 2016.
Meanwhile, SDPSL would be entitled to a call option to acquire the remaining 20% equity interest held by JRAM at any time after 24 months from the completion of the JRAM acquisition at an amount to be determined and mutually agreed before the end of next month.
All the parties in the reverse takeover exercise are expected to enter into a definitive agreement by Sept 30, 2016, upon mutual agreement of the terms in relation to the properties disposal.
Sime’s shares rose 10 sen to close at RM8.09 yesterday, while Saizen REIT gained 2.3 Singapore cents to close at 12.1 Singapore cents.
Source by: The Star Online