Sunway to dispose of stake in Singapore JV for RM118m

KUALA LUMPUR (June 27): Sunway Bhd is disposing of its 30% stake in joint venture (JV) Hoi Hup Sunway Novena Pte Ltd (HHSN) to Hoi Hup Realty Pte Ltd for S$39.88 million (RM118.2 million) in cash. HHSN was set up in December 2012 to undertake the Royal Square at Novena development in Singapore, comprising a hotel, medical and retail units. Royal Square at Novena was successfully completed on July 12, 2017, with HHSN recording accumulated profits of S$132.5 million from the project.

In a statement yesterday, Sunway said the proposed disposal marks the project’s completion and will enable Sunway to exit and monetise its investment in HHSN. The group intends to use the proceeds from the proposed disposal for its new projects, as well as new land bank acquisitions to strengthen its property development presence in Singapore.

In a separate Bursa Malaysia filing, Sunway said its wholly-owned property development unit in Singapore, Sunway Developments Pte Ltd, had entered into a sale and purchase agreement (SPA) with Hoi Hup for the proposed disposal. The exercise is expected to be completed on June 30. Sunway said the estimated loss on disposal arising from the proposed disposal is S$100,000 after taking into consideration the net book value of Sunway’s investment in HHSN as at March 31, 2018 of S$40 million.

“In addition, under the SPA’s terms, Sunway may be able to receive further payment in the form of the earn-out, if any,” it added. Notwithstanding the disposal of the stake in HHSN, Sunway said it has retained an entire floor of medical suites at Royal Square at Novena with total floor area of 8,500 sq ft, with the aim of establishing Sunway Medical’s maiden presence in Singapore. “Targeted to commence operations by end-2018, Sunway Medical Singapore is envisaged to be a collection of clinics housing doctors in various specialisations and a wellness centre,” said Sunway.

This article first appeared in The Edge Financial Daily, on June 27, 2018.

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