Lum Chang buys Jersey unit trust for £51.32 million, acquiring prime London commercial building

SINGAPORE - Mainboard-listed construction firm Lum Chang Holdings announced on Thursday that it had entered into a sale-and-purchase agreement (SPA) on May 13, 2015, to acquire all of the units in a Jersey, Channel Islands unit trust for £51.32 million (S$107.26 million).

The unit trust, 130 Wood Street Unit Trust, has only one asset - a freehold commercial property at 130 Wood Street in London, which is currently fully leased. The building is in a prime office location midway between the Bank of England and St Paul's Cathedral.

The property has 50,522 square feet of Grade A office accommodation on six upper floors with 7,454 square feet of ground floor and basement for wine bar accommodation and the remaining 6,809 square feet of ground floor and basement let out on long leases for retail and storage.

The SPA has been entered via two incorpoorated special-purpose vehicles in Jersey through the group's 70 per cent owned subsidiary, UK Property Investment (UKPI).

The two vehicles, 130 WS Holdings Limited and 130 WS Investments Limited, have an initial paid-up share capital of £1 each, and are incorporated to undertake property investments in the UK.

The unit consideration was satisfied from the internal cash resources of the company and its subsidiaries, via shareholders' loans to UKPI.

The group added that it may explore external debt financing by UKPI to partially offset such shareholders' loans.

As a result of the acquisition, the group's net asset value per share has dropped from 51.96 cents to 51.73 cents while earnings per share have increased from 6.73 Singapore cents to 6.86 Singapore cents.

Net gearing has jumped from 0.19 times to 0.48 times.