IOI Properties receives proposal from CEO to jointly develop Shenton House in Singapore
KUALA LUMPUR (June 25): IOI Properties Group Bhd (KL: IOIPG) has actually received a plan from its group president cum major shareholder Lee Yeow Seng to take part in the property development of Shenton House, a commercial property situated in Singapore that his special vehicle has actually appropriately tendered for, for S$ 538 million (RM1.9 billion).
The present extra present resources obligation– excluding the property development cost, which is to be finalised– is S$ 476 million, which includes land betterment rates, rent top-up premium, and operation expenses, it said.
“Yeow Seng has emphasised to IOIPG that Shenton 101 is all set and capable to proceed with the development planning of Shenton House following the conditions of the tender and that Shenton 101 is well on the way to implemented funding to allow it to advance with the redevelopment and also the factor that Yeow Seng is extending the proposal to IOIPG is to help solve or address the potential problem of interest situation,” IOIPG’s filing read.
Shenton 101 was the single prospective buyer of Shenton House, which lies in Singapore’s central business district. Yeow Seng previously said he felt it was more appropriate to bid for Shenton House through his own vehicle due to the dimension of the subject and the stiff time set by the sales committee on the collective sale.
“The good faith intention of Yeow Seng is not to make a private gain developing from the proposition. Because of this, the factor to consider is to include the initial expense of investment of equity in Shenton 101 and the expense acquired by Shenton 101 for the procurement of Shenton House and any advance costs incurred by Shenton 101 such as consultants’ rates and expenses and tender, application and authorization expenses along with price of finance,” IOIPG included.
According to a bourse declaration, Yeow Seng has actually suggested that IOIPG get entirety or part of his private vehicle, Shenton 101 Pte Ltd, which is preparing to redevelop Shenton House, works for which are set up to begin rearmost of 2025.
“Further, according to the Singapore’s central business district benefit program, Shenton House is qualified for a 25% bonus gross floor space that can be redeveloped right into a mixed-use commercial with non commercial project or a hotel at the GPR of 14. Therefore, Shenton House is allocated for redevelopment right into a fresh 99-year leasehold commercial development,” IOIPG stated.
Yeow Seng and his sibling Datuk Lee Yeow Chor are significant shareholders of IOIPG with their substantial shareholdings in Vertical Capacity Sdn Bhd, which holds 65.67% in IOIPG.
IOIPG said the proposition stands for 4 months, which might be extended by an additional two months if a written demand is received from IOIPG.
According to IOIPG, Yeow Seng has actually recommended the acquisition factor be established based on the actual price of assets incurred by himself and Shenton 101, increased by the equity interest in Shenton 101 to be acquired by IOIPG, or a comparable subscription price for the membership of new shares in Shenton 101.
This is to deal with and minimize the possible problem of attention that are going to arise as a result of his job in the redevelopment of Shenton House through Shenton 101, through which he is the sole shareholder. The objective of the proposal is to line up the involvements of IOIPG thereupon of Shenton 101, which will support the redeveloped real estate as investment upon its effective redevelopment.
Shenton House covers 3,377 square metres and is assigned for commercial usage with a gross plot ratio (GPR) of 11.2. The real property has a 44-year land contract, with the potential to be lengthened to a fresh 99-year lease.
At market close on Tuesday, IOI Properties’ shares dropped four sen or 1.75% to RM2.25, bringing the company a valuation of RM12.39 billion.
