Keppel Corporation’s plans to sell is Keppel Cove marina development at Zhongshan in China’s Pearl River Delta has been blocked by a minority shareholder. A Singapore High Court hearing about the summons trying to prevent the sale was held earlier this week and another one hearing is due in the week beginning December 4, 2017.
On October 2,6 Keppel Corp announced in a notice to the Singapore Stock Exchange that its Keppel Land China Ltd (KLCL) subsidiary had entered into a sale and purchase agreement related to the sale of Keppel Cove marina development.
Through this agreement, KLCL, a wholly-owned subsidiary of Keppel Land Ltd, would divest itself of its 100% stake in Keppel China Marina Holdings Pte Ltd (KCMH) to Delight Prime Ltd, a division of the Hong Kong-listed Logan Property, for Yuan 2.9bn (S$593m). KCMH holds an 80% stake in Sunseacan Investment (HK) Co Ltd, with Sunsea Yacht Club (Hong Kong) Co Ltd holding the remaining 20% stake.
It is the Sunsea Yacht Club (HK) that is challenging the sale deal. In its summons to KLCL and KCMH co-defendants, Sunsea claimed reliefs which aimed to restrain the two co-defendants from completing the divestment. Both KLCL and KCMH were also served a summons filed by SYCHK for various interim injunctions in relation to the foregoing summons.
Keppel Corp indicated that its subsidiaries “will vigorously defend against the summons for interim relief and the suit.” The sale transaction will yield for Keppel Land China a divestment gain of about S$290m upon completion, which is expected to take place by the end of 2017 but which may now be delayed by the court action.
KCMH indirectly owns an 80% stake in Sunsea Yacht Club (Zhongshan) Co Ltd (SYCZS), which owns and is developing Keppel Cove, a residential/marina development on Modao Island, Zhongshan City, China. Covering a total land area of 891,752sq m, Keppel Cove completed Phase 1 of its development, comprising 42 villas, a club house and a marina with 82 berths, in March 2017. When fully completed the marina will have up to 400 berths for yachts up 30m (100ft).
In the October 26 press statement, Ang Wee Gee, CEO of Keppel Land Ltd, said: “Leveraging Keppel Land’s experience in waterfront developments, we have developed Phase 1 of the premium Keppel Cove project. The divestment is in line with our strategy to recycle assets to seek higher returns and rebalance our portfolio to focus on our five key cities of Shanghai, Beijing, Tianjin, Chengdu and Wuxi, where we have established strong track records and local teams.”