IOI Properties receives proposal from CEO to jointly develop Shenton House in Singapore

Yeow Seng and his brother Datuk Lee Yeow Chor are significant shareholders of IOIPG through their substantial shareholdings in Vertical Capacity Sdn Bhd, which holds 65.67% in IOIPG.

At market close on Tuesday, IOI Properties’ shares dropped four sen or 1.75% to RM2.25, giving the company a value of RM12.39 billion.

KUALA LUMPUR (June 25): IOI Properties Group Bhd (KL: IOIPG) has received a proposal from its group president cum major investor Lee Yeow Seng to take part in the development of Shenton House, a business property located in Singapore that his special vehicle has actually successfully tendered for, for S$ 538 million (RM1.9 billion).

According to a stock exchange declaration, Yeow Seng has suggested that IOIPG obtain entirety or part of his own vehicle, Shenton 101 Pte Ltd, which is preparing to redevelop Shenton House, works for which are set up to commence by the end of 2025.

Shenton House covers 3,377 square metres and is marked for retail usage with a gross plot ratio (GPR) of 11.2. The real property has a 44-year land lease, with the possible to be extended to a fresh 99-year lease.

Shenton 101 was the sole bidder of Shenton House, that lies in Singapore’s central business district. Yeow Seng formerly said he felt it was more appropriate to bid for Shenton House by means of his own vehicle because of the size of the subject and the tight timing established by the sales committee on the collective sale.

Kassia Condo Flora Drive

“Yeow Seng has emphasised to IOIPG that Shenton 101 is all set and able to continue with the property development planning of Shenton House under the conditions of the tender which Shenton 101 is well on the way to implemented funding to enable it to advance with the redevelopment and that the purpose that Yeow Seng is prolonging the proposal to IOIPG is to help resolve or deal with the potential conflict of interest circumstance,” IOIPG’s declaring read.

According to IOIPG, Yeow Seng has proposed the acquisition consideration be determined based on the real expense of assets incurred by himself and Shenton 101, multiplied by the equity interest in Shenton 101 to be obtained by IOIPG, or a comparable membership price for the subscription of new shares in Shenton 101.

IOIPG claimed the plan is valid for four months, and that may be extended by an additional 2 months if a written application is received from IOIPG.

The current extra existing funding commitment– excluding the property development cost, which is to be settled– is S$ 476 million, that includes land betterment fee, lease top-up costs, and operation costs, it claimed.

“Further, according to the Singapore’s major business district incentive program, Shenton House is eligible for a 25% bonus gross floor space which can be redeveloped into a mixed-use commercial with residential development or a hotel at the GPR of 14. Thus, Shenton House is earmarked for redevelopment into a fresh 99-year leasehold commercial enhancement,” IOIPG said.

This is to deal with and mitigate the possible problem of interest that will develop as a result of his role in the redevelopment of Shenton House via Shenton 101, through which he is the sole shareholder. The intention of the proposition is to line up the matters of IOIPG with that of Shenton 101, that are going to keep the redeveloped real property as venture upon its effective redevelopment.

“The good faith intention of Yeow Seng is not to make a private gain arising from the proposal. As such, the factor to consider is to involve the first expense of investment of equity in Shenton 101 and the cost acquired by Shenton 101 for the procurement of Shenton House and any advance charges had by Shenton 101 such as specialists’ payments and expenses and tender, application and approval costs in addition to price of finance,” IOIPG included.

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