[SINGAPORE] Global asset manager Keppel, through its real estate division, has divested its entire 42 per cent stake in South Rach Chiec City – the developer of the Palm City development in Ho Chi Minh City – to Vietnamese real estate company Gateway Thu Thiem Joint Stock Company. The move has unlocked total cash proceeds of 2.6 trillion dong (S$136.6 million).
Completed in March, the divestment results in a net divestment profit of about S$55 million for Keppel, it said in a statement on Tuesday (Apr 1).
Palm City is a 30-hectare integrated township located in District 2 of Ho Chi Minh City. The first two residential phases – Palm Residence and Palm Heights – have been completed and handed over in 2017 and 2019, respectively.
Prior to the divestment, Keppel has recognised cumulative profits after tax of about S$24.6 million from the sales of residential units at Palm City over the years.
It noted that there are four remaining plots in the project: two residential plots, a mixed-use plot and a medical plot.
The total proceeds include a cash consideration of 1.7 trillion dong for the 42 per cent equity stake.
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This takes into account the adjusted net asset value of Keppel’s stake as at Mar 4, based on the agreed value of the Palm City development attributable to the sale shares.
The global asset manager has also assigned 840,000 bonds issued by South Rach Chiec to Gateway Thu Thiem for a consideration of 910 billion dong.
This is equivalent to the face value of the bonds and accumulated bond interests up to the date of assignment on Mar 31.
Louis Lim, chief executive officer for Keppel’s real estate arm, noted that this divestment is “another step forward” in Keppel’s plan to monetise a cumulative S$10 billion to S$12 billion of assets by the end of 2026.
He said: “This move demonstrates Keppel’s continued execution of our asset-light strategy despite the challenging market.”
He added that since Keppel embarked on its asset monetisation programme in October 2020, it has unlocked about S$7.1 billion in assets from its balance sheet, excluding businesses such as Keppel Offshore & Marine.
The divestment is not expected to have any material impact on the earnings per share and net tangible assets per share of Keppel for the current financial year.
Shares of Keppel closed down 0.9 per cent or S$0.06 at S$6.84 on Tuesday.
