SINGAPORE (Dec 30): AEI Corporation has entered into a put and call option agreement to sell its premises at 12 Penjuru Lane in western Singapore to logistics provider ACW Holdings for $19 million – more than 10 times the book value of the property.
The single-storey property was used as the main venue for AEI’s manufacturing and extrusion activities before it relocated to its Tuas South factory in January 2017.
The land was leased from the Jurong Town Corporation (JTC) with a tenure of 30 years from June 1, 2013.
AEI says the sale consideration was arrived at based on arm’s length negotiation, taking into consideration the prevailing property market conditions in the area.
Based on the unaudited consolidated financial statements of the group for 1H19, the book value of the property was approximately $1.81 million as at end June.
The excess of the sale consideration over the book value of the property amounts to approximately $17.19 million, with AEI recording a net gain of $17.09 million on the proposed sale.
AEI says the proposed sale will free up financial resources as it transitions into new businesses to enhance its income streams.
In November, AEI had announced that it had entered into a conditional business sale and purchase agreement to dispose the group’s core electronics and precision engineering segment.
“The proceeds from the proposed sale will go towards strengthening the financial position of the group and to facilitate the funding of the group’s overall plans in diversifying into new businesses to enhance the long term value for shareholders,” AEI says in a filing to SGX on Monday.
It adds that none of the directors of the company or substantial shareholders have any interest – direct or indirect – in relation to the proposed sale.
However, it cautions that the proposed sale is subject to numerous conditions, including approval from JTC for change in the use of the property, and approval from AEI’s shareholders.
Shares in AEI closed flat at 85 cents on Monday before the announcement.
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