- City Developments’s sale of its 50.1% stake in the 99-year leasehold South Beach development for S$834m unlocked S$465m in disposal gains. Assuming that the sale had been completed at end-24, net gearing would have improved from 117% to 103%.
- - Read this at SGinvestors.io -
Getting cracking on divestments finally.
- City Developments announced that it had sold its 50.1% stake in the South Beach mixed-use integrated development to IOI Properties Group (IOIPG) for a sale consideration of S$834.2m.
- - Read this at SGinvestors.io -
Use of proceeds.
- City Developments stated that the sale of its stake in South Beach – with expected completion in 2H25 – would result in an estimated S$465m gain on the disposal.
- Importantly, cash proceeds from the disposal would be deployed to reduce bank borrowings and thus improve its net gearing ratio from 117% to 103% (-14ppt). However, we found it interesting that City Developments also chose to add that the capital unlocked would allow it to pursue new acquisitions, which was one of the factors contributing to its current high levels of gearing.
Concurrence from the Chairman & CEO.
- Read more at SGinvestors.io.
