Keppel eyes $114m gain in US$298m sale of stake in Beijing commercial project

Keppel Land China, through a subsidiary, has granted CBD Aether Center an option to buy its 51 per cent stake in the holding company of Beijing Aether Property Development, which owns and is developing the site.
Keppel Land China, through a subsidiary, has granted CBD Aether Center an option to buy its 51 per cent stake in the holding company of Beijing Aether Property Development, which owns and is developing the site. PHOTO: ST FILE

SINGAPORE - Keppel Corp could book a $114 million gain after it sells a 51 per cent stake in a prime commercial site in the Chaoyang district of Beijing for US$297.9 million, the conglomerate announced on Monday (May 28).

Keppel Land China, through a subsidiary, has granted CBD Aether Center an option to buy its 51 per cent stake in the holding company of Beijing Aether Property Development, which owns and is developing the site. The remaining 49 per cent stake in the project is owned by British Virgin Islands-incorporated Xeno Origin. The option price is set at U$94.1 million, which Keppel will be allowed to keep if CBD Aether does not exercise its option within 120 days.

If CBD Aether exercises its option, it has agreed to pay U$297.9 million for the majority stake in the development. The consideration price includes the option fee. About U$282.3 million, which is the total consideration less a portion of the option fee that Keppel has already received, will be placed in escrow as part of the agreement.

Keppel will cease to hold a stake in the development following the sale. If the divestment had been completed on Dec 31, 2017, its net tangible asset per share as at end-2017 would have increased to $6.28 from the reported $6.21. Earnings per share in 2017 would have increased to 18.1 cents from 11.9 cents if the deal had been completed on Jan 1, 2017.