SINGAPORE (THE BUSINESS TIMES) - Keppel Land is divesting its 100 per cent stake in First King Properties, which owns a London office building, for £73.6 million ($131.1 million) in cash.
The transaction is expected to be completed in the first quarter of next year, Keppel Corp said in a regulatory filing on Thursday (Dec 24).
The purchaser is ZGC King Williams Holdings, wholly owned by a fund managed by London and Oxford Capital Markets Limited.
First King owns a freehold nine-storey office building in the City of London, at 75 King William Street.
The purchase price includes about £42.3 million for the shares in First King, subject to completion adjustments. It also includes some £31.3 million to repay shareholder loans that Keppel Land subsidiary Fleuters had extended to First King.
The consideration for the First King shares took into account the adjusted net asset value attributable to the sale shares as at Dec 23, based on the agreed value of the property of £128 million, Keppel Corp said.
Keppel Land acquired the building for £91 million back in 2015. The gain on disposal is estimated to be £6.8 million, including fair-value adjustment to be recognised in the second half of the financial year ending 2020, Keppel Corp said.
It added that over the holding period, the total profit to the conglomerate for the investment since the acquisition, including rental income and capital gains generated by the property, is about £37.2 million.
"The divestment is in line with the company's plan to monetise identified assets and apply the balance sheet space that is released for new growth opportunities under its Vision 2030," Keppel Corp noted.
Keppel Corp shares closed at $5.37 on Wednesday, up seven cents or 1.3 per cent.