On May 13, Chip Eng Seng Corporation : C29 +1.19% lead independent director Abdul Jabbar bin Karam Din acquired 292,400 shares of the company at 42.0 cents per share. With a consideration of S$122,808, this took his direct interest in the homegrown property development and construction group to 0.04 per cent.

 

Abdul Jabbar joined the board on Feb 2, 2018 as an independent director and was appointed lead independent director in April 2021. An executive committee partner with Rajah and Tann Singapore, he heads the firm&rsquo s corporate and transactional practice. He has more than 25 years&rsquo extensive experience in mergers and acquisitions, joint ventures, employment, banking and finance, general commercial and private client work, both local and international.

PROPERTY player Chip Eng Seng Corporation : C29 -1.11% is planning to acquire a minority stake in a property located at 8 Shenton Way, also known as AXA Tower, for S$2.1 million.

 

Its wholly-owned subsidiary CEL Shenton has entered into a share purchase agreement with the sellers to acquire 21 per cent of the issued share capital of PRE 13, which has an effective interest of 50 per cent of the property.

 

The acquisition will see CEL Shenton holding an effective interest of 10.5 per cent in the property, Chip Eng Seng said on Tuesday (Apr 5).

 

The property, which is a 50-storey landmark Grade A office development with a retail podium, has a total site area of 10,984 square metres (sq m), and a 99-year leasehold land tenure starting from Jul 19, 1982.

 

Chip Eng Seng noted that the property is intended to be redeveloped into a mixed-use commercial and residential development comprising office, retail, hotel and resident components, subject to relevant approval, which includes approval for a fresh 99-year lease. If the redevelopment takes place, the property will have a maximum allowable gross floor area of 144,162 sq m and a gross plot ratio of 13.125.

 

The property is currently owned by Perennial Shenton Property, which is in turn owned by Perennial Shenton Holding. PRE 13 owns 50 per cent of Perennial Shenton Holding, while the other 50 per cent is owned by Alibaba Singapore Holding.

 

Meanwhile, the other shareholders of PRE 13 include Perennial Singapore Investment Holdings, Wilmar International unit Piermont Holdings, and HPRY Holdings, which is owned by a director and controlling shareholder of Perennial Holdings Kuok Khoon Hong. These shareholders will continue to hold a majority stake in PRE 13 after the proposed acquisition, translating to a 29 per cent effective stake in the property.

 

In a separate announcement, Perennial noted that the equity consideration for the transactions was based on an agreed asset value of S$1.7 billion for the property. In 2015, a consortium led by Perennial Real Estate Holdings had acquired the property at a purchase price of S$1.2 billion.

 

It said transactions are expected to be completed by the end of April, while preliminary redevelopment works at the property have already commenced and are expected to be completed in 2028.

 

Perennial, an integrated real estate and healthcare company, is expected to provide property management and asset management services upon the completion of works.

 

Chip Eng Seng expects the proposed acquisition will allow it to acquire a " meaningful stake" in a prime real estate in the Central Business District, while its participation in a large-scale redevelopment project with other partners should help mitigate financial and execution risks.

 

Under the proposed acquisition, CEL Shenton will, among others, commit up to S$251 million in loans for the property' s redevelopment and funding requirements. It will fund the acquisition through internal cash sources, and CEL Shenton' s pro-rata share of the equity portion of the total redevelopment costs for the property will be funded from internal cash sources and/or bank borrowings.

 

The company does not expect the acquisition will have a material impact on its net tangible assets and earning per share for the current financial year ending Dec, 31 2022.

 

Additionally, Chip Eng Seng also noted that Sing-Haiyi Emerald - an associate company of its controlling shareholders Gordon Tang and Celine Tang - has also separately agreed to acquire a similar stake in PRE 13 with the same consideration, that will result in it holding an effective stake of 10.5 per cent in the property.

CES Hospitality, the wholly-owned subsidiary of Chip Eng Seng Corporation, has entered into a joint venture (JV) with Ariva Hospitality on Jan 31, forming the joint venture company (JVC) CES-Ariva Hospitality.

 

Ariva Hospitality is a Singapore-incorporated company that is also in the hospitality management business with a particular focus on serviced residences.

The JV will provide management services to hotels and serviced residences as well as provide technical consultancy, advisory services and marketing services to the hotels and serviced residences.

 

In addition, the JV will train hired staff to management the day-to-day operations of such hotels and serviced residences.

 

CES Hospitality is the sole shareholder of the JVC, holding 350,000 ordinary shares with a capital of $350,000, fully contributed by the company.

 

Under the terms of the joint venture agreement (JVA), Ariva Hospitality will contribute $150,000 to the JV within 30 days from the date of the agreement after which, CES Hospitality will own a 70% stake in the JVC. Ariva Hospitality will own the remaining 30% in the JVC.

 

The JVA also contains non-compete and non-solicitation undertakings to restrict the JV partners from competing with the JVCo&rsquo s business.

 

Separately, CES Hospitality has also entered into a shareholders&rsquo loan agreement with Ariva Hospitality and the JVCo, where the JV partners have agreed to provide the JVCo a loan facility of up to $10 million to fund the JVCo&rsquo s working capital requirements.

 

Each shareholders&rsquo loan to be drawn down under the loan facility will be provided by the JV partners according to their respective shareholding percentage under the JVCo.

 

The JVCo is entitled to request to draw down from the loan facility during the period commencing from the date of the shareholders&rsquo loan agreement and end on either the date on which the loan facility is fully drawn down, or the date of termination of the JVA.

 

CES Hospitality has also entered into a corporate services agreement with the JVCo where the JVCo has appointed the former as the corporate services manager. As corporate services manager, CES Hospitality will provide certain administrative support, accounting, human resources and information technology services to the JVCo for a monthly fee.

 

According to Chip Eng Seng, the group has been looking at opportunities to broaden its hospitality business portfolio by acquiring hospitality assets as well as by building up its capability to provide management services to hotels and serviced residences. The provision of management services to hotels and serviced residences will be a complementary extension of the group&rsquo s hospitality business.

Interested person transaction (IPT)

 

Tang Dynasty&rsquo s Gordon Tang and Celine Tang are the controlling shareholders of Chip Eng Seng Corporation Celine Tang is the non-independent and non-executive director and non-executive chairman of the company. Ariva Hospitality, on the other hand, is an indirect wholly-owned subsidiary of Tang Dynasty.

Under the listing manual, Ariva Hospitality is defined as an associate of Gordon and Celine Tang, while the JVCo is an associate as well as an &ldquo entity at risk&rdquo of Chip Eng Seng Corporation.

 

Accordingly, the participation by CES Hospitality and Ariva Hospitality in the JV, the provision of the services by CES Hospitality under the corporate services agreement and the provision of each shareholder loan by both companies are deemed IPTs.

Chip Eng Seng Corporation

 

On Jan 10, Chip Eng Seng Chip Eng Seng: C29 -1.19% Corporation independent director Yaacob bin Ibrahim acquired 100,000 shares of the company for a consideration of S$42,500.

 

This was Professor Yaacob' s first acquisition of Chip Eng Seng Corporation shares since his appointment to the board in February 2020.

 

The former government minister is currently a Professor of Engineering at the Singapore Institute of Technology, where he is also adviser to the president of the Singapore Institute of Technology and director of the Community Leadership and Social Innovation Centre.

 

Prior to Professor Yaacob' s acquisition, between Jan 6 and 7, Chip Eng Seng Corporation non-executive chairman Celine Tang increased her total interest in the homegrown construction and property development group from 37.25 per cent to 38.04 per cent.

 

Chip Eng Seng announced on Friday (Dec 17) that its wholly owned subsidiary CES Capital Holdings has entered into an agreement to sell its property at 69 Ubi Crescent for S$28 million.