IOI Properties receives proposal from CEO to jointly develop Shenton House in Singapore
Yeow Seng and his brother Datuk Lee Yeow Chor are significant investors of IOIPG via their significant shareholdings in Vertical Capacity Sdn Bhd, which holds 65.67% in IOIPG.
“Yeow Seng has emphasised to IOIPG that Shenton 101 is ready and capable to continue with the property development preparation of Shenton House within the conditions of the tender which Shenton 101 is well on the way to implemented funding to allow it to go on with the redevelopment and also the factor that Yeow Seng is extending the contract to IOIPG is to aid settle or attend to the potential conflict of interest situation,” IOIPG’s declaring read.
At market close on Tuesday, IOI Properties’ shares dropped 4 sen or 1.75% to RM2.25, bringing the business a value of RM12.39 billion.
Shenton House covers 3,377 square metres and is marked for retail use with a gross plot ratio (GPR) of 11.2. The real property has a 44-year land contract, with the possible to be prolonged to a fresh 99-year lease.
“The good faith intention of Yeow Seng is not to make a personal gain emerging from the proposal. Thus, the consideration is to involve the preliminary expense of investment of equity in Shenton 101 and the cost accumulated by Shenton 101 for the purchase of Shenton House and any upfront charges had by Shenton 101 such as specialists’ fees and expenses and tender, application and authorization prices as well as price of finance,” IOIPG added.
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Shenton 101 was the sole bidder of Shenton House, which lies in Singapore’s main business district. Yeow Seng previously said he felt it was more appropriate to bid for Shenton House by means of his private vehicle due to the dimension of the subject and the tight time set by the sales council on the collective sale.
According to IOIPG, Yeow Seng has actually recommended the purchase consideration be determined based on the real cost of assets acquired by himself and Shenton 101, increased by the equity interest in Shenton 101 to be obtained by IOIPG, or an equivalent subscription value for the subscription of new stakes in Shenton 101.
IOIPG claimed the proposal is valid for four months, and that may be lengthened by another 2 months if a written application is obtained from IOIPG.
This is to attend to and mitigate the potential problem of interest that will occur due to his job in the redevelopment of Shenton House through Shenton 101, through which he is the sole shareowner. The intent of the proposal is to coordinate the involvements of IOIPG thereupon of Shenton 101, that will keep the redeveloped real estate as venture upon its effective redevelopment.
The current additional current capital obligation– omitting the property development cost, that is to be settled– is S$ 476 million, which includes land betterment rates, rent top-up costs, and transaction expenditures, it stated.
“Further, according to the Singapore’s major business district reward system, Shenton House is eligible for a 25% reward gross floor area which can be redeveloped right into a mixed-use commercial with residential development or a hotel at the GPR of 14. Therefore, Shenton House is allocated for redevelopment into a fresh 99-year leasehold commercial development,” IOIPG said.
According to a stock market filing, Yeow Seng has proposed that IOIPG get all or portion of his own vehicle, Shenton 101 Pte Ltd, that is preparing to redevelop Shenton House, works for which are scheduled to begin by the end of 2025.
KUALA LUMPUR (June 25): IOI Properties Group Bhd (KL: IOIPG) has received a proposition from its group chief executive officer cum major shareholder Lee Yeow Seng to take part in the property development of Shenton House, a commercial property situated in Singapore that his special vehicle has appropriately tendered for, for S$ 538 million (RM1.9 billion).
