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Keppel's planned 2.9b yuan disposal of China marina stake still up in the air

Business Times
27 Dec 2017
Jacqueline Woo

Keppel Corporation's planned 2.9 billion yuan (S$595.13 million) disposal of its stake in a China marina project remains in limbo as the project's minority shareholder continues to try to block the deal.

The group told the Singapore Exchange in a filing on Tuesday that the Singapore High Court has approved an application by Sunsea Yacht Club (Hong Kong) Company to stop Keppel from completing the sale, pending Sunsea's application with the Court of Appeal.

The order will be in place until Sunsea's application has been addressed by the Court of Appeal.

Sunsea has a 20 per cent stake in a joint venture with Keppel that owns and develops Keppel Cove, a residential and marina project in Zhongshan City, China. The remaining 80 per cent is held by Keppel China Marina Holdings, which Keppel Land China is attempting to sell to Hong Kong-listed Logan Property.

Sunsea first started legal action to block Keppel's divestment in November. The Business Times reported earlier that it understands Sunsea is seeking to restrain the completion of the divestment in light of an alleged breach of contract on Keppel's part.

On Dec 15, the High Court dismissed Sunsea's summons for interim relief to prevent the sale from happening. A week later, Sunsea sought permission to appeal against the dismissal of the summons for interim relief, but was denied by the High Court and ordered to pay costs.

But Sunsea told the High Court it planned to go to the Court of Appeal to appeal the Dec 22 decision. The High Court has therefore allowed an application by Sunsea to restrain Keppel from completing the divestment until Sunsea's application with the Court of Appeal is addressed.

If the deal goes through, Keppel Land China, a wholly-owned unit of Keppel Land, would be able to recognise a gain of about S$290 million.

Keppel said in its latest statement that Keppel Land China will work closely with its lawyers to expedite the disposal of the application to the Court of Appeal.

Separately, on Monday, Keppel said it has clinched a government land tender to buy a prime 18.03 hectare residential site in Wuxi, China, for 2.53 billion yuan (S$517 million).

A Keppel Land China unit plans to develop the site - with a gross floor area of about 360,500 square metres - into a residential project with 2,053 high-rise, 456 mid-rise and 246 low-rise units. The site sits 5km from Wuxi's downtown area, is close to the Sunan Shuofang International Airport and Wuxi railway station.

"With Wuxi's strong economic growth and positive residential market outlook, coupled with the prime location of the site in close proximity to amenities, we are confident that the new residential development will receive strong demand from homeowners looking for quality, thoughtfully designed homes with strong value propositions," Keppel Land chief executive Ang Wee Gee said in a statement.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.