IOI Properties receives proposal from CEO to jointly develop Shenton House in Singapore
IOIPG said the proposition is valid for four months, which may be extended by another two months if a written demand is received from IOIPG.
KUALA LUMPUR (June 25): IOI Properties Group Bhd (KL: IOIPG) has actually obtained a plan from its group chief executive officer cum major shareowner Lee Yeow Seng to participate in the development of Shenton House, a business property situated in Singapore that his special vehicle has appropriately tendered for, for S$ 538 million (RM1.9 billion).
According to IOIPG, Yeow Seng has proposed the purchase consideration be established based on the real price of investment accumulated by himself and Shenton 101, increased by the equity interest in Shenton 101 to be acquired by IOIPG, or an equivalent subscription price for the membership of brand-new shares in Shenton 101.
The existing added existing funding commitment– excluding the development cost, which is to be finalised– is S$ 476 million, which includes land improvement premium, rent top-up premium, and transaction expenditures, it stated.
“Further, according to the Singapore’s central business district reward program, Shenton House is eligible for a 25% reward gross floor space that can be redeveloped right into a mixed-use commercial with non commercial development or a hotel at the GPR of 14. Thus, Shenton House is allocated for redevelopment right into a fresh 99-year leasehold business improvement,” IOIPG said.
Shenton House covers 3,377 square metres and is assigned for commercial use with a gross plot ratio (GPR) of 11.2. The real property has a 44-year land contract, with the potential to be prolonged to a fresh 99-year lease.
“Yeow Seng has actually emphasised to IOIPG that Shenton 101 is prepared and able to continue with the property development preparation of Shenton House under the conditions of the tender which Shenton 101 is well on the way to put in place funding to allow it to advance with the redevelopment and that the reason that Yeow Seng is expanding the proposal to IOIPG is to assist solve or deal with the possible dispute of interest situation,” IOIPG’s declaring read.
This is to deal with and mitigate the possible dispute of interest that are going to develop because of his job in the redevelopment of Shenton House with Shenton 101, in which he is the single investor. The intention of the plan is to arrange the matters of IOIPG thereupon of Shenton 101, which will keep the redeveloped real estate as venture upon its successful redevelopment.
Yeow Seng and his brother Datuk Lee Yeow Chor are significant shareholders of IOIPG through their significant shareholdings in Vertical Capacity Sdn Bhd, which takes 65.67% in IOIPG.
“The good faith intention of Yeow Seng is not to make a private gain developing from the proposition. As such, the consideration is to involve the preliminary price of investment decision of equity in Shenton 101 and the cost incurred by Shenton 101 for the procurement of Shenton House and any type of upfront charges had by Shenton 101 like professionals’ rates and costs and tender, application and approval expenses along with cost of finance,” IOIPG added.
Shenton 101 was the single prospective buyer of Shenton House, which lies in Singapore’s major business district. Yeow Seng formerly said he felt it was better suited to bid for Shenton House via his own vehicle due to the dimension of the subject and the limited time set by the sales council on the collective sale.
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.
According to a stock exchange declaration, Yeow Seng has actually suggested that IOIPG get entirety or portion of his exclusive vehicle, Shenton 101 Pte Ltd, that is preparing to redevelop Shenton House, works for which are set up to begin by the end of 2025.
