Boustead Projects, via its wholly-owned subsidiary BP-Vietnam Development (BPVD), has signed an option agreement with Vietnamese conglomerate company Khai Toan (KTG) for the proposed purchase of a 49% stake in a holding company for an industrial real estate fund.
Under the option agreement, BPVD will pay VND289.25 million ($16.6 million) to KTG in three tranches in return for a call option to purchase 49% of the issued and paid-up share capital of the holding company.
BPVD will also provide KTD with a put option to sell the 49% stake in the holding company. Upon either company exercising its option, BPVD and KTD will enter into a sale and purchase agreement for BPVD to acquire the 49% stake in the holding company.
Boustead Projects has previously announced partnerships with KTG for the acquisition of a jointly-owned industrial real estate manager, Boustead & KTG Industrial Management Company (BKIM), as well as the proposed acquisition of 49% interest in KTG Industrial Bac Ninh Development (KTG Bac Ninh).
See also: CGS-CIMB ups Boustead Projects' TP to $1.40 on attractive valuation and portfolio
According to its filing to SGX on June 2, Boustead Projects states that through the holding company, Boustead Projects and KTG will co-sponsor KTG & Boustead Industrial Logistics (KBIL), a proposed Vietnamese logistics and industrial real estate development fund that will consist of 13 seed assets located in Hanoi and Ho Chi Minh. The assets are said to have an average occupancy of completed industrial facilities in excess of 95%.
Of the 13 seed assets, KTG will inject 10, while Boustead Projects will inject three, namely Boustead Industrial Park Phases 1, 2A and 2B.
Two of the 10 see assets to be provided by KTG are held under KTG Bac Ninh. As part of the option agreement, the earlier proposed acquisition of 49% interest in KTG Bac Ninh will be unwound to facilitate the injection of the two assets into KBIL.
Under KBIL Phase 1, the seed assets will be acquired and transferred to KBIL and amount to about US$141 million ($186.3 million) in gross asset value covering about 840,000 square metres of land area and about 550,000 square metres of gross leasable area.
Under KBIL Phase 2, other than the seed assets, KBIL intends to acquire other potential industrial real estate assets under an identified pipeline of targets, which would have the potential to double the land area and gross leasable area in the portfolio.
Shares in Boustead Projects closed flat at $1.19 on June 1.
