Frasers Property has announced that its wholly-owned subsidiary Suzhou Sing He Xiang Management Consultancy Co (SHX) has entered a framework agreement with two joint venture partners for a potential investment in land. SHX will provide funding of around RMB1.6 billion ($337 million) for the investment.
In addition, SHX will enter a loan agreement with one of the partners, extending a bridging loan of RMB1 billion ($210.6 million) to the partner, who will use it towards payments in relation to the proposed investment. The two joint venture partners in the agreement are related entities.
See: Frasers Property FY21 earnings up 343% to $833.1 mil on revaluation gains
Details of the land and the identity of the joint venture partners were not disclosed, as the proposed investment is by way of a tender and details are currently confidential due to the commercial sensitivities of the tender process.
If the investment materialises, the parties will enter into a joint venture in relation to a project company to own and develop the land. SHX will acquire an indirect of up to 40% in the joint venture.
Based on pro forma financial statements for the FY2021 ended September, the proposed investment results in a decrease in Fraser Property's earnings per share from 22.6 cents to 22.2 cents.
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Shares in Frasers Property closed at $1.18 on Nov 25.
