[SINGAPORE] An associate of property investor Thakral Corporation has launched an initial public offering (IPO) to raise up to A$750 million (S$628.2 million) at an implied post-money valuation of A$1.58 billion, the mainboard-listed company said in a bourse filing on Tuesday (Jun 17).
The IPO of Australian over-50s lifestyle resorts operator GemLife Communities is set to be Australia’s largest this year.
It is fully underwritten by JPMorgan and Morgan Stanley in Australia, noted Thakral, which holds a 31.7 per cent effective interest in GemLife.
The stapled securities are expected to be listed and quoted on the Australian Securities Exchange upon closing of the IPO on Jul 3.
Thakral intends to subscribe an additional 600,962 GemLife stapled securities at the IPO price of A$4.16 per stapled security, translating to a total of 64,000,962 GemLife stapled securities.
Thakral’s effective interest in GemLife will be about 16.8 per cent post-dilution, the company said.
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The company noted that the listing will result in key financial reporting changes, where GemLife will cease to be an associate and instead be accounted for as an investment at fair value through profit or loss in Thakral’s financial statements.
This means Thakral will no longer record its share of GemLife’s profits as previously done under the equity accounting method.
Instead, future financial results will reflect periodic fair value adjustments based on GemLife’s securities price, together with any dividends declared, Thakral said.
On a pro forma basis, Upon successful listing, Thakral’s net asset value (NAV) attributable to shareholders is expected to increase by 67 per cent from S$1.28 per share to about S$2.15 per share.
Pro forma financial effects are “strictly for illustrative purposes only”, Thakral noted.
As part of the reclassification to fair value through profit or loss, Thakral will recognise a one-off gain in its income statement for the 2025 financial year, resulting in a substantial increase in profit and earnings per share (EPS).
“On a pro forma basis, had the GemLife listing and reclassification occurred on Jan 1, 2024, EPS would have increased by approximately 381 per cent from S$0.225 to S$1.08 for the financial year ended Dec 31, 2024,” the company said.
The process is also expected to strengthen Thakral’s balance sheet and reduce its gearing, while unlocking opportunities for the company to explore further investments to drive future growth, it said.
Its pro forma total assets are expected to increase by about 42 per cent to S$512.1 million, primarily reflecting the pro forma increase in net assets arising from the recognition of the fair value gain upon the reclassification, Thakral noted.
With the repayment of receivables from GemLife, pro forma net borrowings are expected to decline about 56 per cent to S$22.3 million.
This means Thakral will also achieve a “healthy total cash and bank balance” on a pro forma basis of about S$38.4 million.
This will result in a pro forma gearing ratio of 0.23 after GemLife successfully lists, compared to 0.39 as at Dec 31, 2024.
“We are confident that the listing will unlock significant shareholder value and set the stage for an exciting new chapter of growth for both GemLife and Thakral,” said Inderbethal Singh Thakral, chief executive and executive director of Thakral.
In April, GemLife said it was considering its strategic options, which could include the consideration of a possible IPO. It said then that it was planning to conduct a series of introductory meetings with investors, and that the review of these options would be managed independently without the involvement or participation of Thakral Corp.
On Jun 6, Thakral said GemLife was in “advanced discussions with potential underwriters for the proposed IPO”, although it noted that there was no assurance or certainty that the proposed IPO would proceed and close successfully.
GemLife is said to be the country’s largest privately owned land lease developer, owner and operator, with nearly 10,000 homes in more than 30 communities.
Thakral shares closed at S$1.44 on Tuesday, S$0.03 or 2 per cent lower.
