SINGAPORE - Property developer OUE's executive chairman and controlling shareholder Stephen Riady is buying a good class bungalow (GCB) at Nassim Road from an OUE subsidiary for $95 million, OUE announced in a regulatory filing on Wednesday night (Aug 14).
OUE's indirect wholly-owned unit OUE Reef Development has entered a sale-and-purchase agreement with Dr Riady for the 3,182 sq m plot at Nassim Road and the property upon it.
The sale is in the ordinary course of business of the company, said OUE. Under the agreement, completion of the sale and purchase of the property shall take place on Dec 31, 2019.
OUE Reef Development acquired the building plot in 2016 and developed it. A temporary occupation permit for the GCB built by OUE Reef Development was obtained on Aug 6, 2019.
The property was valued, on the basis of market value as at June 25, 2019, at $87 million by Cushman and Wakefield VHS, using the comparable sales method, and $85.5 million by Knight Frank, using the direct comparison method.
Based on the independent valuations, the average market value is $86.25 million. The $95 million consideration for the sale of the property is 10.1 per cent higher than this.
"The sale price was arrived at after taking into account various factors, including the independent valuation reports by the valuers," said OUE. "There is no discount to the average market value of the property."
Under listing rules, the deal is an interested-person transaction. Dr Riady has a deemed interest in about 68.65 per cent of OUE's issued shares, excluding treasury shares. He has recused himself, and will continue to recuse himself, from the Board's decision-making in relation to the transaction.
OUE said that its audit committee has considered the terms of the transaction "and is of the view that the terms and conditions of the transaction are fair and reasonable, on normal commercial terms, and are not prejudicial to the interests of the company and its minority shareholders".
The transaction is not expected to have a material impact on OUE's net tangible assets or earnings per share for the financial year ending Dec 31, 2019.