Keppel unit's partner sues to block 2.9b yuan sale of China marina stake

The Keppel Cove projec is an integrated residential and marina development in the Pearl River Delta region of Zhongshan city in Guangdong, China.
The Keppel Cove projec is an integrated residential and marina development in the Pearl River Delta region of Zhongshan city in Guangdong, China.PHOTO: KEPPEL CORP

SINGAPORE - Keppel Corp's planned 2.9 billion yuan (S$593 million) disposal of its stake in a China marina project is being blocked for now by the minority shareholder of that project through legal proceedings in Singapore.

Keppel, a conglomerate with businesses in rigbuilding and property, among others, said that it will vigorously defend against those attempts.

In an announcement yesterday, Keppel said that wholly owned subsidiary Keppel Land China (KLC) and KLC's fully owned unit Keppel China Marina Holdings (KCMH) have been served with writs of summons by Sunsea Yacht Club (Hong Kong) Co seeking to stop KLC from selling KCMH.

KCMH owns 80 per cent of a joint venture that owns and develops Keppel Cove, a residential and marina development in Zhongshan City, China, with Sunsea owning the remaining 20 per cent.

KLC had inked an agreement on Oct 25 to divest its entire stake in KCMH to Delight Prime, a unit of Hong Kong-listed Logan Property, for 2.9 billion yuan.

If the deal is completed, KLC would be able to recognise a gain of about $290 million from the divestment, which Keppel said was in line with its "strategy to recycle assets to seek higher returns and rebalance its portfolio to focus on selected high-growth cities in China".

A hearing on the matter took place on the afternoon of Nov 20, where the court ordered that affidavits be filed, Keppel said. Another hearing is expected to take place in the later part of the week starting Dec 4, 2017.

Separately, Keppel unit, Keppel Land, is axing its stake in an Indonesian associate that is set to sell off a West Bali site.

This move is meant to help sharpen the company's focus on the Jakarta market.It expects to record a net divestment gain of about S$17.6 million by the end of 2017, parent group

Keppel Land now has an effective 24.5 per cent in Purimas Straits Resort, which has entered into an agreement to sell the 20.5 ha site to Bali Sudamala Development.

Keppel Land will also be divesting its entire interest in Purimas Straits Resort, through capital reduction and sale of shares.The land in the Tanah Lot district was acquired in the late 1990s to be redeveloped into an integrated resort featuring luxury villas. But those plans never materialised.