Key Sentence:
- City Developments – controlled by billionaire Kwek Leng Beng and his family.
- Decided to sell its stake in Sincere Property Group to avoid a “long-term bankruptcy recovery” for the Chinese subsidiary, which did so without money.
In an exchange filed late Friday, the Singapore-based real estate developer Kwek Leng Beng said it agreed to sell 63.8% of the group to HCP Chongqing Property Development, which owns 80% of Sincere, for $1. “Remuneration for the shares to be sold was agreed upon taking into account the value of the sale. Current liquidity issues, and the possible reorganization of Tulus’ bankruptcy,” said a statement from City Developments.
Along with the withdrawal of its stake in Sincere, Kwek Leng Bengthe company announced. That it had increased its effective stake in Shenzhen Tech Park to 65% by acquiring Sincere’s stake in the industrial park. The remuneration for the additional pledge is offset by the risk of City Development’s remaining S$117 million debt against Tulus.
“The Board of Directors believes that sincere disclosure and the Shenzhen agreement are in the best interests of the group. As it will allow the group to exit its stake in Sincere and avoid a possible long-term reorganization of Sincere’s bankruptcy.”
Urban development.
The financial problems of the righteous weigh heavily on the development of the city. The company removed $1.78 billion ($1.3 billion) from its Tulus investments last year. Causing it to post a net loss of $1.9 billion for 2020, its worst financial performance so far. In July, a creditor filed for bankruptcy against a Shanghai-based real estate developer in Chongqing No. 5 Temporary People’s Courts in China.
“We are nearing the end of the negative news stream from Tulus,” said Vijay Natarajan, an analyst at RHB Singapore. “Bankruptcy in China can be a long process and requires time and focus on management.
They realized that this battle was not worth fighting. “
With respect to the payment of the remaining loan made to Sincere,” the statement said.
City Developments took over a controlling stake in real estate in April 2020 as the Covid-19 pandemic devastated the global economy. The investment sparked a row between CEO Kwek Leng Beng and his cousin Kwek Leng Peck, who left in October. In December, two independent directors – who also disagreed with the investment decision – resigned.
Kwek, 80, is also the Singapore Hong Leong Group chairman, founded by his father in 1941. His cousin Quek Leng Chan, a billionaire, heads his group in Malaysia, also known as Hong Leong. Kweks is ranked 8th in a list of Singapore’s 50 wealthiest people published last month. His eldest son Sherman has been CEO of City Developments since 2018.