Perennial to buy Pontiac unit's 50% stake in Capitol Singapore for S$528m

An earlier settlement agreement paved the way for either Perennial or Pontiac Land to purchase all of the others' shares in the iconic Capitol Singapore.
An earlier settlement agreement paved the way for either Perennial or Pontiac Land to purchase all of the others' shares in the iconic Capitol Singapore.PHOTO: ST FILE

SINGAPORE - Perennial Real Estate Holdings is buying Pontiac Land affiliate Chesham Properties' 50 per cent stake in Capitol Singapore for S$528 million, of which Perennial will pay S$129.6 million in cash.

Upon completion of the sale, Perennial will discharge loans by Chesham to Capitol Singapore amounting to S$368.6 million and all interest accrued on the said loans, Perennial said in a filing with the Singapore Exchange on Monday morning (March 12).

In addition, the property developer will also make ancillary payments of S$3 million to Patina Hotels & Resorts.

The execution of the sale agreement will commence by Tuesday and the completion of the sale expected to be wrapped up within eight weeks of the date of the sale and purchase agreement.

The consideration was based on a property price of S$1.028 billion, 2.6 per cent above the 2017 valuation for Capitol Singapore of about S$1.002 billion.

Acrimonious disagreements between the co-owners of Capitol Singapore - an integrated development located at the junction of Stamford Road and North Bridge Road - over some key issues of the project had earlier resulted in Perennial seeking court action to wind up three associated companies that are equally owned by Perennial and Pontiac Land.

But Perennial lost the case and made an appeal. The Court of Appeal dismissed Perennial's appeal against the High Court's decision last November.

The settlement agreement inked on Jan 3 provided a mechanism for either Perennial or Pontiac Land to purchase all of the others' shares in the iconic heritage property.

Said a Chesham spokesman on the sale: "Chesham is pleased with the sale of its interest. We look forward to redeploying the proceeds into other profitable opportunities."

Perennial shares were trading at S$0.855 as at 10.53am.