BOUD PROJ Company Announcement
BOUSTEAD PROJECTS PROPOSED ACQUISITION
OF MEZZANINE DEBT OF PROPERTY GROUP
SINGAPORE, 12 AUGUST 2021
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Introduction
The Board of Directors ("Board") of Boustead Projects Limited (the "Company") wishes to announce that its wholly-owned subsidiary, BP-Real Estate Investments Pte Ltd ("BP-RE"), Roark Capital Ltd and Lim Teck Lee Investments Pte Ltd (collectively, the "Purchasers", each a "Purchaser") have on 12 August 2021 entered into a notes purchase agreement (the "NPA") with Onward Capital Pte Ltd, Fabia Enterprises Limited, Good Crown Limited and Key Trading
Limited (collectively, the "Vendors", each a "Vendor"), pursuant to which the Purchasers agree to acquire S$110,000,000 in aggregate principal amount of notes due 2020 (the "Notes") issued by SC Aetas (Cayman) Limited (the "Issuer") to the Vendors pursuant to the respective subscription agreements dated 29 July 2019 entered into between the Issuer and each Vendor.
The Notes are to be acquired from the Vendors in the manner and proportion set out in the NPA, where each Purchaser will acquire such proportion of the Notes held by each Vendor as set out in the NPA. Upon completion of the NPA, the Company will own 50% of all the Notes through BP-RE, 25% will be held by Roark Capital Ltd and the balance 25% will be held by Lim Teck Lee Investments Pte Ltd. - About Vendors and Purchasers
2.1) Vendors
Based on enquiries of the Company, the Vendors are private and/or institutional investors. The Vendors and their directors or shareholders are not related to the Company or its directors.
2.2) Purchasers
The Purchasers, namely BP-RE, Roark Capital Ltd and Lim Teck Lee Investments Pte Ltd, are not related to one another. Roark Capital Ltd and Lim Teck Lee Investments Pte Ltd are investment holding companies of private investors.
- Information in Relation to Notes
3.1) The Notes were issued subject to and have the benefit of the trust deed dated 29 July 2019
("Trust Deed") entered into between the Issuer and Lion Trust (Singapore) Limited as trustee and security trustee for the holders of the Notes (the "Trustee" or the "Security Trustee"), as
amended and supplemented by a supplemental trust deed dated 2 October 2020 (the "Supplemental Trust Deed"). The Notes are secured by inter alia a charge over the shares (the
"Share Charge") in SC Aetas Holdings Pte Ltd (the "Singapore Subsidiary"), an assignment of
accounts, an assignment of shareholder loans and a personal guarantee.
3.2) Pursuant to a call option deed dated 30 July 2019 entered into between the Issuer and the
Security Trustee (the "Call Option Deed"), the Security Trustee was also granted an option to purchase all (but not some only) of the shares in the Singapore Subsidiary (the "Call Option"),
being one (1) ordinary share as at the date of this announcement. Upon exercise and
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Company Announcement
completion of the Call Option, the purchaser (namely, the Security Trustee) or its nominee would become the sole shareholder of the Singapore Subsidiary.
3.3) The Singapore Subsidiary owns the property situated at 30 Bideford Road, Singapore 229922, known as Orchard Hills/Orchard Hills Residences (the "Property"). The land is designated as Lot 730N Town Subdivision 27. The Property has been developed as an 18-storey mixed development comprising of targeted hospitality, healthcare and commercial components. The site area is 2,006.9 square metres or thereabouts and the approximate gross floor area is 14,637.89 square metres. Temporary Occupation Permit was obtained on 10 January 2020. There is an existing loan owing by the Singapore Subsidiary to the Senior Secured Creditors which is secured by a mortgage over the Property.
3.4) The key terms of the Notes are as follows:
Principal amount | S$110,000,000 in principal amount of Notes. | |
Issue date | 30 July 2019. | |
Maturity date | The Original Maturity Date was the date falling twelve (12) | |
months from the Issue Date and was extended pursuant to the | ||
Supplemental Trust Deed (as defined below) to 30 November | ||
2020. | ||
Redemption | The Issuer may redeem the Notes in whole, but not in part, at | |
any time (the "Call Settlement Date") at a redemption price equal | ||
to 100.0% of their principal amount together with accrued and | ||
unpaid interest to such date and all premium (if any) payable | ||
thereon, by giving not less than 15 nor more than 30 days' notice | ||
to the noteholders (which notice shall be irrevocable and shall | ||
oblige the Issuer to redeem the Notes on the Call Settlement | ||
Date at such price plus accrued interest to such date and all | ||
premium (if any) payable thereon). | ||
Interest | The Notes: | |
i) | Bear interest at the rate of 13% per annum for each | |
interest period falling during the period from (and | ||
including) the Issue Date up to (and excluding) the | ||
Original Maturity Date; and | ||
ii) | (If the maturity date of the Notes is extended pursuant to | |
the Supplemental Trust Deed), bear interest for each | ||
interest period falling during the period from (and | ||
including) the Original Maturity Date up to (and | ||
excluding) the date on which all sums due in respect of | ||
the Notes have been repaid in accordance with the | ||
formula set out in Condition 7.1 of the Notes. | ||
Default interest | If on or after the due date for payment of any sum in respect of | |
the Notes, payment of all or any part of such sum is not made | ||
against due presentation of the Notes, the Issuer shall pay | ||
interest at a rate which is (a) in the event such default occurs | ||
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Company Announcement
prior to the Original Maturity Date, 3% per annum higher than the rate then applicable and (b) in the event such default occurs after the Original Maturity Date, at a rate of 18% per annum. Such interest shall be payable on the principal amount of the Notes then outstanding (both before and after judgment) from such due date up to the day on which such sums due in respect of the Notes are received by Lion Trust (Singapore) Limited (as the principal paying agent) on behalf of the relevant noteholder or by the relevant noteholder.
3.5) The Issuer is a company established under the laws of the Cayman Islands.
3.6) As of the date of this announcement, the Notes are in default as to payment of principal and interest. Based on responses from the Vendors, they are not aware of the occurrence of an event of default in respect of payment obligations of the Singapore Subsidiary to its secured lenders, which borrowings are secured inter alia over the Property.
- Rationale for Proposed Transaction
4.1) The transaction is intended to proceed by way of a purchase of all and not some only of the Notes by the Purchasers (the "Proposed Notes Purchase"). The Proposed Notes Purchase will be beneficial for the Company as it generates a good financial return and is adequately secured by various instruments as set out in paragraphs 3.1 and 3.2, including the Share Charge and Call Option for shares in the Singapore Subsidiary which in turn holds the Property.
4.2) The Purchasers may also potentially take legal and beneficial ownership of the Property (the "Potential Acquisition" and together with the Proposed Notes Purchase, the "Proposed Transaction"):
- By enforcing on the security granted in respect of the Notes through the exercise of the Call Option for the acquisition of all of the shares of the Singapore Subsidiary which owns the Property;
- Through the acquisition of the Property pursuant to any enforcement proceedings whether instituted by the Senior Secured Creditors or the Security Trustee ("Enforcement Sale"); or
- Through the acquisition of the Property pursuant to an auction or bilateral sale process ("Negotiated Sale").
4.3) In the event that the Purchasers successfully take legal and beneficial ownership of the Property or the shares of the Singapore Subsidiary, the Potential Acquisition will be beneficial for the Company's property investment and fund management business, enabling the Company to expand and diversify its property portfolio, as well as increase its revenue stream through the ownership and management of the Property. It is intended that the Purchasers will hold interests in the Property in proportion to their holdings of the Notes.
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Company Announcement
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Principal Terms of NPA
5.1) Purchase of Notes
Pursuant to the NPA, the Vendors shall sell and the Purchasers shall purchase the Notes, free from all encumbrances and together with all rights, security, interests, benefits and advantages attaching thereto as at completion of the NPA ("Closing").
5.2) Consideration
The consideration for the Proposed Notes Purchase shall be S$117,000,000 (the "Consideration"), which shall be payable in accordance with the provisions of the NPA. The Consideration to be paid by BP-RE for 50% of the Notes shall be S$58,500,000. The Consideration comprises the principal and interest outstanding on the Notes.
The Purchasers shall also pay to the Vendors an amount equal to S$12,287,816 (the "Additional Consideration"), upon the occurrence of any of the following events:
- Upon exercise of the Call Option and registration of any Purchaser or its nominee in the electronic register of members of the Singapore Subsidiary maintained by the Accounting and Corporate Regulatory Authority of Singapore as the holder of all the shares in the capital of the Singapore Subsidiary; or
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The completion of the acquisition of the Property by any of the Purchasers (the
"Property Completion") for a consideration amount not more than certain agreed thresholds pursuant to an Enforcement Sale or Negotiated Sale respectively,
Provided that if (i) the exercise of the Call Option, (ii) the Property Completion by way of a Negotiated Sale, or (iii) the commencement of any enforcement action in relation to the Notes does not take place within 18 months from Closing, the Additional Consideration shall be payable by the Purchasers to the Vendors. The portion of the Additional Consideration to be paid by BP-RE shall be S$6,143,908.
The consideration for the purchase of the Notes was arrived at on a willing-buyer,willing-seller basis, after arm's length negotiations and taking into consideration the principal amount and interest (including default interest) outstanding on the Notes.
The Company intends to satisfy BP-RE's portion of the Consideration and Additional Consideration for the Proposed Notes Purchase by way of cash funded from the Company's internal resources.
5.3) Closing Date
Closing is intended to take place on 13 August 2021 or such other date as the parties may mutually agree in writing, subject to the provisions of the NPA.
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Company Announcement
- Financial Information
6.1) Book Value, Net Tangible Asset Value and Open Market Value
Based on the latest unaudited financial statements of the Issuer as at 31 March 2021, the Notes were carried at book value of S$110,000,000 (excluding accrued interest calculated to be approximately S$12,359,000). The Notes are currently in default as to principal and interest. There is no open market value for the Notes as they are not listed or publicly traded.
Based on the latest unaudited financial statements of the Singapore Subsidiary as at 31 March
2021, the Property's carrying value was S$720,188,616.
6.2) Net Profit
The Notes are currently in default as to principal and interest. Based on the unaudited financial statements of the Issuer in respect of the financial period ended 31 December 2020, the interest (including default interest but excluding fees and expenses) on the Notes was calculated to be approximately S$17,013,000.
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Chapter 10 of Listing Manual
The relative figures of the Proposed Notes Purchase computed on the bases set out in Rule 1006 (a) to (e) of the Listing Manual, using the latest audited financial statements of the Group for the financial year ended 31 March 2021, are as follows:
Rule 1006 | Bases | % |
a) | The net asset value of the assets disposed of, compared with the | Not |
Group's net asset value. | applicable | |
b) | The net profits attributable to the assets acquired, compared with the | 7.4(1) |
Group's net profits. | ||
c) | The aggregate value of the consideration given, compared with the | 19.6(2) |
Company's market capitalisation based on the total number of issued | ||
ordinary shares of the Company excluding treasury shares. | ||
d) | The number of equity securities issued by the Company as | Not |
consideration for an acquisition, compared with the number of equity | applicable | |
securities previously in issue. | ||
e) | The aggregate volume or amount proven and probable reserves to | Not |
be disposed of, compared with the aggregate of the Group's proved | applicable | |
and probable reserves. This basis is applicable to a disposal of | ||
mineral, oil or gas assets by a mineral, oil and gas company, but not | ||
to an acquisition of such assets. | ||
Notes:
- The relative figure of 7.4% in Rule 1006(b) is computed by dividing the unaudited fair value gain on the Notes of approximately S$10,366,000 (which is default interest on BP-RE's portion of the Notes), by the Group's audited net profit of S$140,564,000 for the financial year ended 31 March 2021. There is no open market value for the Notes as they are not listed or publicly traded. "Net profits" means profit or loss including discontinued operations that have not been disposed and before income tax and non-controlling interests.
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Boustead Projects Ltd. published this content on 12 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 August 2021 01:20:08 UTC.
