As a recap,Tannery Holdings first entered a joint venture with Far East Civil Engineering (FECE) and Sekisui House (Sekisui) to develop a land parcel at Woodlands Square and the incorporation of a private limited company to undertake the development. This was completed in 2020, and each party held one-third interest in the share capital of Woodlands Square.
Far East Orchard says that its acquisition of Sekisui’s share capital will benefit the company by increasing its share of recurring income. The consideration is that 6.667% is lower than that of the net asset value of Woodlands Square, reflecting a discount.
The company says that this allowed them to utilise its excess cash and generate higher returns to deliver long-term value to shareholders.
The consideration for the acquisition was $25 million. As at Jan 24, the Tannery acquisition and FECE acquisition have each been completed, and both entities now own 40.0% and 60.0% of the share capital of Woodlands Square respectively.
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The joint venture agreement between Tannery, FECE and Sekisui has been amended to remove Sekisui as a party and reflect the Agreed Proportion of Tannery and FECE in Woodlands Square.
Shares in Far East Orchardclosed flat at $1.02 on Jan 24.
