Sime Darby in reverse takeover of Singapore-listed Saizen REIT


Sime Darby in reverse takeover of Singapore-listed Saizen REIT

PETALING JAYA, 16 August: Sime Darby Bhd will inject industrial assets in Australia into a Singapore-listed real estate investment trust (REIT), Saizen REIT, in a transaction that will see the group taking over the REIT and establishing a REIT platform.

The deal is subject to a due diligence into the financial, legal, tax and business affairs of Saizen REIT and manager Japan Residential Assets Manager Ltd (JRAM), and JRAM and the trustee of Saizen REIT being satisfied with their due diligence and holding structure of the properties.

In a filing with the stock exchange, Sime Darby said its indirect wholly-owned subsidiaries Hastings Deering (Australia) Ltd (HDAL) and Sime Darby Property Singapore Ltd (SDPSL) have entered into a framework agreement with Saizen REIT for the disposals.

HDAL will sell certain industrial properties in Australia to Saizen REIT which will then be master leased to HDAL and SDPSL.

The consideration sum for the disposals will be negotiated and be based on independent valuations.

Meanwhile, SDPSL also entered into a conditional share purchase agreement with JRAM for the acquisition of an 80% stake in JRAM for US$1 million (RM4.0 million). It comes with a call option for the remaining 20% stake in JRAM two years after the deal has been completed.

The completion of the property disposals and the JRAM acquisition are inter-conditional, and a definitive agreement must be signed by Sept 30, 2016.

Listed in June 2007, Saizen REIT was the first REIT listed in Singapore to offer exclusive access to Japanese residential real estate, according to its website.

Sime Darby said the proposals are in line with its corporate strategy to develop a REIT platform, in order to generate a resilient and recurring income stream.

“Moving forward, this REIT platform is expected to have greater flexibility in its future fundraising exercises to build a sizeable international portfolio of assets, which Sime Darby will benefit from its direct stake in Saizen REIT,” it noted.

Sime Darby is of the view that the proposals will enable the group to monetise the properties, on which HDAL will continue its operations under the master lease, while deleveraging its balance sheet.

“This will further allow Sime Darby to reallocate capital and drive continuous improvements in financial and operational efficiency,” it explained.

Sime Darby shares rose 10 sen to close at RM8.09 yesterday on some 11.22 million units traded.