11 Nov 2013 17:00
11 November 2013
ASIAN GROWTH PROPERTIES LIMITED
Termination of Management Agreement
The board of directors of Asian Growth Properties Limited (the "Company") (AIM Stock Code: AGP), the Hong Kong based China property development and investment company, announces that the Company and South-East Asia Investment And Agency Company, Limited ("SEAI"), a wholly-owned subsidiary of S E A Holdings Limited (the holding company of the Company), have mutually agreed to terminate the management agreement dated 18 September 2006 (the "Management Agreement") with effect from 1 January 2014.
The Company entered into the Management Agreement with SEAI on 18 September 2006 whereby the Company appointed SEAI as manager for the provision of management services (which comprised of investment property and development project management services) to the Company and its subsidiaries (the "Group") in respect of the Group's property portfolio. In consideration of such services, the Company pays service fees (which comprise of sourcing, project management and portfolio management fees) to SEAI. The amount paid for the year ended 31 December 2012 was HK$141.85 million (approximately UK£11.32 million, based on the exchange rate of UK£1 = HK$12.5323 as at 31 December 2012).
After detailed planning of the works and resource requirements for the Group's property portfolio, the Company and SEAI have mutually agreed to terminate the Management Agreement with effect from 1 January 2014. The existing SEAI personnel who are handling the works for managing the Group's property portfolio will continue to look after the Group's property portfolio and such staff costs and related office overheads etc. will be borne by the Group directly from 1 January 2014. In addition, the lease agreements for Dah Sing Financial Centre between the Group and SEAI will terminate with effect from 1 January 2014. These two lease agreements contributed annual rental income of HK$14.19 million (approximately UK£1.14 million, based on the exchange rate of UK£1 = HK$12.4620 as at 8 November 2013) for the year 2013. It is expected that the overall costs incurred by the Group will be reduced after termination of the Management Agreement.
For more information, please contact:
Lu Wing Chi Tel: +852 2828 6363
Executive Director
Asian Growth Properties Limited
Richard Gray Tel: +44 207 886 2500
Andrew Potts
Panmure Gordon (UK) Limited
(Nominated Advisor)