SINGAPORE (THE BUSINESS TIMES) – Singapore-listed OUE Lippo Healthcare (OUELH) has entered into sale and buy agreements to divest two wholly-owned subsidiaries, which collectively maintain 100 per cent curiosity in 12 nursing houses in Japan, for a consideration of $163.5 million.
The subsidiaries, OUELH Japan Medical Amenities and OUELH Japan Medical Property, shall be divested to Perpetual (Asia), the trustee of First Actual Property Funding Belief (Reit) for a purchase order consideration of round $163.2 million and $300,000, respectively. First Reit, which holds a portfolio of healthcare properties in Singapore and Indonesia, can be listed right here.
The transaction is in step with OUELH’s asset-light technique, and is predicted to assist sharpen its give attention to high quality healthcare service supply, the group mentioned in a bourse submitting on Wednesday (Dec 8).
The entire consideration includes $131.5 million in new First Reit models, issued at 30.5 cents per unit, $15.8 million in money and $16.2 million in intercompany balances, which shall be assumed by First Reit. The intercompany balances embrace loans and different quantities owed by the corporate to the subsidiaries.
OUELH chairman Lee Yi Shyan mentioned: “With the completion of the proposed transaction, the group can redeploy its monetary sources to create new capacities for progress.”
The group expects the transaction will help with First Reit’s repositioning technique for future progress throughout the pan-Asian market.
Upon completion of the proposed transaction, the group’s holdings in First Reit will improve to 33.2 per cent from 15.3 per cent.
First Reit’s publicity to markets outdoors Indonesia will even improve to 27.1 per cent of its asset worth amounting to $335.6 million on a professional forma foundation, from 3.6 per cent at $33.8 million as at June 30. In the meantime, rental earnings for markets outdoors Indonesia is predicted to develop to 22.3 per cent at $10.5 million on a professional forma foundation, from 5.3 per cent at $2 million as at June 30.
As for the professional forma monetary results on OUELH, the group’s web tangible property per share post-transaction is predicted to rise to 7.4 cents, from 7.3 cents as at June 30, whereas its earnings per share is predicted to stay at 2.6 cents, as at Jan 1.
The nursing houses, positioned in Hokkaido, Kyoto, Nagano, and Nara, have a complete capability of 1,451 models. In response to impartial valuation stories, the properties have a market worth of 24.2 billion yen (S$291 million) as at Nov 12.
OUELH Japan Medical Amenities not directly owns the 12 nursing houses, that are leased to impartial nursing house operators by way of OUELH Japan First Tokutei Mokuteki Kaisha.
In the meantime, OUELH Japan Medical Property owns OUELH Japan Administration, a joint inventory firm established to behave as the present asset supervisor of the Japan nursing houses.
The proposed transaction is topic to shareholders’ approval on the group’s upcoming extraordinary normal assembly.
OUELH presently holds a 40 per cent stake in First Reit’s supervisor and a direct 15 per cent stake in First Reit. The latter’s portfolio consists of 20 properties together with hospitals, nursing houses and procuring malls in Indonesia, Singapore and South Korea.
Chairman of the board of the supervisor of First Reit Christopher Williams mentioned the acquisition of the 12 Japan nursing houses is yield accretive and represents a chance for the Reit to diversify into a brand new marketplace for progress. Submit-acquisition, distribution per unit is predicted to extend from 1.3 cents to 1.31 cents, or by roughly 0.8 per cent.
He added that the acquisition will improve the Reit’s publicity to developed markets, from 3.6 per cent of its asset worth presently, to 27.1 per cent post-completion. That will even place First Reit as a “premier healthcare Reit” in Asia Pacific with $1.3 billion in complete property.
Further reporting by The Straits Occasions
