RichLand Logistics will consolidate storage and logistics under one facility.
Eneco Energy will acquire a warehouse at 15 Gul Way for $24.2m to consolidate its logistics operations and support expansion.
The company’s wholly owned subsidiary, RichLand Global, entered into a sale and purchase agreement with Perpetual (Asia), as trustee of ALOG Trust, on 7 August.
The acquisition requires shareholder approval as the consideration represents 79.59% of Eneco Energy’s market capitalisation.
The property is a JTC site in Jurong Industrial Estate comprising a three-storey ramp-up warehouse, an ancillary office, and a three-storey workers’ dormitory. It has a gross floor area of about 26,419.9 square metres and a leasehold tenure of about 30 years from 1 October 2003.
“The [Proposed Acquisition] will enable RichLand Logistics Services Pte. Ltd. to consolidate storage and logistics operations under a single, owned facility and support service expansion,” Eneco Energy said in a bourse filing.
The acquisition will be funded through a combination of internal resources and bank borrowings.
The property will be used by RichLand Logistics Services for its own operations and will not generate rental income.
The acquisition would leave the group’s net tangible assets per share at 0.88 cents and earnings per share at 0.00 cents.
It is subject to approvals from JTC Corporation, the Urban Redevelopment Authority for the dormitory, and Eneco Energy’s shareholders.
Eneco Energy will convene an extraordinary general meeting to seek shareholder approval for the acquisition.
The sale represents a 16.9% premium to ALOG Trust’s $20.7m valuation.
“The net proceeds from the Divestment will be deployed to repay outstanding borrowings, finance potential acquisitions, asset enhancement initiatives and redevelopments, and/or fund general working capital requirements,” ESR-REIT said.
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