Late this evening Soilbuild announced their intention to dispose of KTL offshore, at 61 and 71 Tuas Bay Drive, for a purchase consideration of S$55m.
The buyer is a wholly-owned subsidiary of Soilbuild Group Holdings Ltd. Soilbuild Group Holdings Ltd is the sponsor of Soilbuild REIT.
KTL Offshore was originally purchase on 31 Oct 2014. Consisting of two adjacent purpose-built factories along Tuas Bay Drive, 61 Tuas Bay Drive is a three-storey industrial building with ancillary office 71 Tuas Bay Drive is a part two/three storey building development with an ancillary office.
The valuers Savills and CBRE estimated the open market value of the property to be S$53m and S$50.4m respectively.
Soilbuild REIT will complete the transaction fully in cash.
Divestment cost of S$0.3m will be incurred by Soilbuild REIT, mainly for professional and other fees and expenses.
The property is currently leased to KTL Offshore Pte Ltd under a lease agreement which expires on 25 Aug 2021.
As at 28 Dec 2017, Soilbuild REIT’s trade receivable due from KTL Offshore comprised approximately 6 months of rent and other charges, includign a sum of S$1.5m.
According to Soilbuild REIT, the rationale of the divestment is to unlock and release capital, allowing them to pursue growth strategies, improve portfolio diversification and minimize the REIT’s exposure to credit risk.
Net proceeds of the divestment would be approximately S$54.7mil (S$55m less S$300k of transaction expenses).
An estimated gain of S$1.7m will be realized.
The proceeds of the divestment may be used to fund new acquisitions, finance capital expenditure, repay debt, for working capital requirements etc.
As of publishing of this article, the impact on the net asset value per unit, distribution per unit and aggregate leverage has not been disclosed.
It will be disclosed in the Circular which will be released soon.
For those keen to inspect the divestment documents such as option agreement, independent valuation reports by Savills and CBRE, 2016 audited financials, Trust Deed among others, they are available at 25 Changi South Street 1, SB Building, S486059.
Documents are available for inspection during business hours for the next 3 months.
The announcement in full as follows.