BP-Vietnam Development, the wholly-owned subsidiary of Boustead Projects, has entered into a sale and purchase agreement with Bui Duc Manh to fully acquire his 8.6 million ordinary shares in KTG Industrial Bac Ninh Development Joint Stock Company on Jan 29.
The shares amount to a 49% stake in KTG Industrial.
As at Jan 29, Bui holds 49% of the issued share capital in KTG Industrial. Khai Toan Joint Stock Company and its nominee collectively hold the remaining 51%.
KTG Industrial, a leading conglomerate in electrical appliances, building materials and industrial real estate in Vietnam, is the sole owner and developer of two land lots within the Yen Phong Industrial Zone in Bac Ninh, Vietnam.
The properties comprise a land lot with spanning 36,000 sqm and a net leasable area (NLA) of over 21,000 sqm across six ready-built factories which are 100% leased. The lot has a lease of some 47 years and 11 months from Dec 4, 2018.
The second lot has about 60,000 sqm in land area and an NLA of 37,000 sqm across 10 ready-built factories which are 100% leased. The second lot has a lease of about 47 years and 4 months from July 15, 2019.
Based on its unaudited financial statements for the period ended Sept 30, 2020, KTG Industrial’s net asset value (NAV) stands at VND177.4 billion ($10.2 million).
The purchase price for the sale shares will be 49% of the adjusted NAV of the target.
The purchase price was initially assessed to be some VND158.8 billion.
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Under the agreement, the purchase price will be paid across three tranches: BP-Vietnam will pay a deposit of about US$1.4 million ($1.9 million), which is equivalent to about 20% of the purchase price.
Upon the completion of the agreement, it will pay a further US$3.5 million to KTG Industrial.
An additional sum of US$2.0 million will be paid to KTG under the terms of the agreement.
The agreement should be completed within three business days after the fulfilment or waiver of the conditions.
Furthermore, KTG Industrial and Boustead and KTG Industrial Management Company (BKIM) will enter into an asset management agreement and property management agreement in respect to the two properties.
BKIM is a 50%-50% joint venture company (JVC) between KTG and Echo Base-BP Capital (Vietnam).
Echo-Base BP Capital is a wholly-owned subsidiary of Boustead Projects’ 50%-owned JVC company.
According to Boustead Projects, the agreements with BKIM will enable the company to general additional income from the provision of asset management and property management services with regard to the target properties.
The proposed acquisition is said to be made in the “ordinary course” of the company’s real estate business. It is also expected to extend its presence in the Vietnam market.
Shares in Boustead Projects closed 1 cent lower or 1.0% down at $1.01 on Jan 29.
