Both companies share a common controlling shareholder and chairman, Celine Tang. She holds 44.3% of OKH Global, and together with her husband, Gordon Tang, they hold 38.23% of Chip Eng Seng.
In addition, Lock Wai Han, CEO and executive director of OKH Global, sits on Chip Eng Seng’s board as an independent director.
OKH Global says that both Celine Tang and Lock had “abstained from all deliberations” on this proposed transaction.
The property is a ten-storey industrial building with a basement carpark located within the Paya Lebar iPark. It has a gross floor area of 10,839.93 sqm sits on a land area of 4,335.9 sqm. It has a remaining lease of about 20 years. According to OKH Global, the sale has to be approved by JTC Corp.
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OKH says it plans to go ahead with the sale for a few reasons.
First, the property only has a remaining lease of about 20 years which may impact its future value. It has previously tried to solicit interest but did not receive any offers.
The property is now mortgaged for a loan and with the proceeds from the sale, OKH Global can reduce its financing costs.
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The proposed sale is also an opportunity to unlock the underlying value or capitalise its investment in the property and that the capital can be recycled for future growth and investments.
In addition, OKH says its audit committee is of the view that the proposed sale is “on normal commercial terms and is not prejudicial to the interests of the company and its minority shareholders.”
OKH Global shares closed Nov 8 at 2.5 cents, unchanged for the day.
