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CAPITALAND'S Ascott Holding China has sold its 100 per cent stake in Central BVI to Ascott China Fund for US$14.3 million.
Ascott Holding China and Central BVI are both indirect, wholly owned subsidiaries of CapitaLand, which has an indirect 33 per cent interest in Ascott China Fund.
Upon completion of the divestment, CapitaLand's interest in Central BVI, and the latter's wholly owned subsidiaries Central HK and Central Xi'an, will fall from 100 per cent to 33 per cent.
The completion is expected to be within three months from the agreement and is also subject to satisfactory due diligence and necessary approvals.
Through its subsidiaries, Central BVI owns serviced residence Citadines Xi'an Central, which is managed by Ascott Shanghai.
It will continue operations under the same management after the sale.
The cash consideration of US$14.3 million was decided on a willing-buyer willing-seller basis, and took into account the adjusted net asset value of Central BVI as at Feb 28, plus a deemed cost of funding of the acquisition of the property, amounting to US$0.1 million.
This also took into consideration an independent valuation of the property at 139 million yuan (S$29.7 million) as at Feb 28.
The cash consideration also accounted for the assignment to Ascott China Fund of a total loan of US$14.2 million which Central HK owes Ascott Holding China.
Thirty per cent of the cash consideration has been paid as a deposit to Ascott China Fund.
The 70 per cent balance will be paid when the divestment is completed.
CapitaLand expects to register a gain of about S$2.8 million in its group consolidated accounts on completion of the sale.
Based on its unaudited financial statements for the quarter ended March 31, CapitaLand estimated an increase in earnings per share from 1.2 to 1.3 cents, assuming the divestment was effected on Jan 1.
Assuming it was effected on March 31, the impact on its net tangible assets per share would not be material.
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