Net cash flow of $498m; plan to redeploy capital for more developments
CAPITALAND has entered into a share purchase deed for the sale of its indirect wholly owned subsidiary Hua Lei Holdings, which indirectly owns 100 per cent of Capital Tower Beijing.
Many offers: The tower's buyer is a Fortune 500 company that hopes to set up its HQ in BeijingIn a statement yesterday, CapitaLand said the consideration of US$352 million takes into account the assignment of a shareholder's loan of US$166 million and values Capital Tower Beijing at US$488 million.
CapitaLand said it will obtain net cash flow of about $498 million and expects to recognise a gain of $163 million. It said Capital Tower Beijing had been intended as a core long-term asset and the divestment following an unsolicited offer will allow it to redeploy the capital to undertake more developments in China.
The divestment is CapitaLand's second in less than a week.
On Friday last week it announced that it would divest its 30 per cent stake in Inverfin - whose principal asset is Menara Citibank in Kuala Lumpur - to IOI Corporation for RM586.7 million (S$244.6 million). It said it would recognise a gain of $22.1 million.
Capital Tower Beijing was completed in 2006. CapitaLand said it received unsolicited offers from 'several prospective investors' but would only say that the buyer is a Fortune 500 company that hopes to set up its headquarters in Beijing.
It is understood that CapitaLand has its Beijing office in Capital Tower Beijing and has no plans to move.
CapitaLand president and CEO Liew Mun Leong said: 'This transaction fully demonstrates CapitaLand's skill-sets and expertise in adding value to real estate projects and its ability to unlock value for shareholders despite current volatile financial markets.'
CapitaLand said Capital Tower Beijing had been intended as a core long-term asset, but that divestment will allow it to redeploy the capital to undertake more developments in China.
Separately, CapitaLand subsidiary Australand said yesterday that it has completed the final phase of its non-underwritten one-for-one entitlement offer, raising A$461 million (S$553 million). It said 769 million new stapled securities will be allotted under the offer at A$0.60 apiece.
In July 28, CapitaLand said it had given an unconditional commitment to subscribe for its 54.2 per cent pro rata entitlement.
This comprised 502,772,610 stapled Australand securities, for a total of A$302 million.
Following the completion of the entitlement, CapitaLand now holds 59.3 per cent of Australand.
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