LONDON (Alliance News) - Asia Growth Properties Ltd Wednesday said it will receive over GBP11.0 million from the sale of Target Group on top of the agreed consideration.
In late February, Asia Growth struck a deal to sell Target Group, which owns the property known as Dah Sing Financial Centre in Hong Kong, for around GBP926.0 million. The 38-storey commercial and office building property has a gross floor area and total lettable area of approximately 37,214 square metres and 32,606 square metres respectively and 156 car parking spaces.
The price achieved was above the valuation of the property at the end of 2015 of GBP880.0 million.
On Wednesday, Asia Growth said it will receive a further GBP11.4 million from the purchaser on top of that consideration. The purchaser will pay an extra GBP7.4 million to compensate for capital expenditure paid by Asia Growth on property, furniture, fixtures and fittings and another GBP4.0 million to cover the amount of funds left in the bank to maintain the property.
It means the overall consideration for the sale is now GBP938.0 million, and after Asia Growth has paid off a bank loan secured against the property of GBP183.0 million, will have netted GBP743.0 million from the deal. Asia Growth said the overall capital gain from the sale is around GBP65.0 million.
Asia Growth shareholders will need to approve the deal at an extraordinary general meeting on April 29, and the proceeds will be solely used to reinvest into the business if approved.
"The board believes that the disposal provides an optimum opportunity for the company to realise cash and unlock the value of its investment in the property at fair market value," said Asia Growth.
"After the disposal, the company will continue with its current business of property investment and development, hotel operation and property and asset management in Hong Kong and mainland China," it added.
Asia Growth said its trading continues to be in line with expectations.
Asia Growth shares were up 7.3% to 22.0 pence per share on Wednesday afternoon.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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