TA Corporation, on April 1, announced that it has proposed to dispose of its property, 12 On Shan at 12 Shan Road for $86.5 million.
TA Corporation’s indirect wholly-owned subsidiary, TA Realty, had issued an option to purchase dated March 11 to RL Properties. The option was validly exercised by the latter on March 31.
RL Properties is a joint venture between RL Properties (a wholly-owned subsidiary of Roxy-Pacific Holdings), Macly Capital and LWH Holdings.
Under the option, 5% of the purchase price will be paid as at its exercise. The remaining 95% of the purchase price will be paid upon the completion of the sale under the option.
The completion is slated to take place within three months from the date of the contract or four weeks after the date of the written notice served by TA Realty to the purchaser.
Following the sale, TA Corporation is expected to receive net proceeds of around $85.5 million. The sum comprises the proposed sales proceeds of $86.5 million, less the selling costs of about $1.0 million.
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The net proceeds after repaying borrowing collateralised by the property from the proposed disposal will be used for the group’s general working capital purposes.
Based on TA Corporation’s financial statements for the FY2021 ended Dec 31, 2021, the value of the property’s net tangible assets (NTA) comes up to around $94.1 million.
The net profit attributable to the property is around $0.3 million.
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The deficit of the proceeds from the proposed disposal over the book value of the property together with the plant and equipment is approximately $7.6 million.
As such, the group is expected to net a loss of $8.6 million on the proposed disposal.
12 On Shan (formerly Shan Court) is a 15-storey freehold serviced apartment in Balestier that was completed in 2018.
The building has a total of 78 units with a total net lettable area (NLA) of 51,652 sq ft and gross floor area (GFA) of 68,048 sq ft.
The property, which was originally a residential development, was converted to become a serviced apartment due to prevailing poor market conditions at the time, as well as other external business factors that included certain property market cooling measures.
On Feb 17, 2021, 12 On Shan was listed for sale at $93 million.
Shares in TA closed flat at 9.3 cents.
