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

KUALA LUMPUR (June 25): IOI Properties Group Bhd (KL: IOIPG) has gotten a proposal from its group chief executive officer cum major shareowner Lee Yeow Seng to join the property development of Shenton House, a business property located in Singapore that his special vehicle has effectively tendered for, for S$ 538 million (RM1.9 billion).

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

According to a stock market declaration, Yeow Seng has proposed that IOIPG get entirety or part of his private vehicle, Shenton 101 Pte Ltd, that is intending to redevelop Shenton House, works for which are arranged to start rearmost of 2025.

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

“Further, according to the Singapore’s main business district reward program, Shenton House is eligible for a 25% bonus gross floor area 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 business improvement,” IOIPG claimed.

Shenton 101 was the single bidder of Shenton House, which is located in Singapore’s central business section. Yeow Seng formerly pointed out he felt it was more appropriate to bid for Shenton House via his private vehicle because of the dimension of the subject and the tight time set by the sales committee on the collective sale.

According to IOIPG, Yeow Seng has suggested the purchase consideration be determined based on the actual price of investment acquired by himself and Shenton 101, multiplied by the equity interest in Shenton 101 to be acquired by IOIPG, or an equal registration worth for the membership of brand-new stakes in Shenton 101.

“Yeow Seng has stressed to IOIPG that Shenton 101 is ready and capable to move on with the improvement organizing of Shenton House under the conditions of the tender which Shenton 101 is well on the way to established funding to enable it to proceed with the redevelopment and that the factor that Yeow Seng is extending the proposition to IOIPG is to assist resolve or deal with the potential conflict of interest situation,” IOIPG’s declaring read.

The current added existing funding obligation– excluding the development cost, which is to be settled– is S$ 476 million, which includes land improvement premium, lease top-up premium, and transaction expenses, it stated.

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This is to address and alleviate the possible problem of attention that will occur because of his part in the redevelopment of Shenton House with Shenton 101, in which he is the single investor. The intention of the proposal is to align the interests of IOIPG thereupon of Shenton 101, which are going to hold the redeveloped real estate as investment upon its effective redevelopment.

At market close on Tuesday, IOI Properties’ shares lost 4 sen or 1.75% to RM2.25, bringing the company a worth of RM12.39 billion.

“The good faith intention of Yeow Seng is not to make a private gain occurring from the proposal. Therefore, the factor to consider is to include the first cost of investment decision of equity in Shenton 101 and the expense incurred by Shenton 101 for the procurement of Shenton House and any kind of advance costs had by Shenton 101 like professionals’ rates and expenditures and tender, application and approval costs as well as price of finance,” IOIPG added.

IOIPG said the plan stands for four months, and that may be lengthened by an additional two months if a written application is gotten from IOIPG.

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