Keppel Land raises stake in Nam Long Investment via convertible bond sale and conversion

Vietnam 200,000 dong noteVietnamese currency

Keppel Land said on Friday that it raised its stake in Nam Long Investment Corp., or NLG, after selling some of its holdings of the Ho Chi Minh City housing developer’s convertible bonds and converting the rest to shares.

Ibeworth Pte., a wholly owned subsidiary of Keppel Land, sold 51 percent of its total 500 billion Vietnamese dong, or total of around S$29.4 million, of its NLG convertible bonds for 393 billion dong, or around S$23.2 million, to third party investors, it said in a filing to SGX on Friday after the market close.

The divestment creates “sufficient headroom” in NLG for Keppel Land to convert to remaining 49 percent of the bonds to shares, it said. NLG has a foreign shareholding limit of 49 percent, it noted.

After converting the bonds to shares by end-2018, Keppel Land will become NLG’s second-largest shareholder and its stake will rise to about 10 percent from around 5 percent, it said.

Keppel Land, which is the property arm of Keppel Corp., will recognize a gain of S$17.5 million on the divestment and conversion of the bonds, it said.

At the same time, Keppel Land’s wholly owned subsidiary, Portsville Pte., entered a conditional agreement to divest 70 percent of Dong Nai Waterfront City to NLG for a total consideration of 2.683 trillion dong, or around S$157.8 million, the filing said.

Keppel Land will retain 30 percent of the Dong Nai project, which includes a 170-hectare township in Dong Nai province, and is within a one hour drive from Ho Chi Minh City’s central business district, it said. The township could yield around 7,850 homes, with terraces, villas and mid-rise apartments, and around 1.4 million square feet of commercial space, it said.

“The early conversion of the convertible bonds demonstrates our confidence in NLG’s growth and paves the way for future collaborations,” Linson Lim, president of Keppel Land (Vietnam), said in the statement.

“We will also be able to enjoy future upsides in the development of the Dong Nai township with our retained 30 percent stake in the project coupled with our significant shareholding in NLG,” Lim added.

 

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