CapitaLand acquires 14.7% additional interest in Raffles City Shenzhen

The acquisition was worth RMB531.7 million or approximately S$99.3 million.

In a statement, the company said that the Acquisition is part of CapitaLand’s ongoing business development and is in line with CapitaLand’s strategy to further strengthen its presence in the People’s Republic of China.

The Acquisition is done through CapitaLand’s wholly-owned subsidiary, CapitaLand LF (Cayman) Holdings Co., Ltd (“CLCayman”) which has today signed a Sale and Purchase Agreement with CapitaLand AIF Limited (a 44.44% owned associated company of CapitaLand) and Gainfield Holdings Limited (a party unrelated to CapitaLand) (collectively the “Vendors”), to acquire the Vendors’ respective 25% and 6.25% interests (the “Acquired Interests”) in Keisha Limited (“Keisha”) in which CLCayman has an existing interest of 68.75%.

Keisha, a company incorporated in the Cayman Islands has an interest of 73% in the Property. The remaining 27% interest in the Property is held by a party unrelated to CapitaLand. The Property is located in the commercial district of Shenzhen City Nanshan District. The Property is an integrated development that will comprise a Grade A office tower, a shopping mall, and a serviced residence component.

The Consideration was arrived at on a willing-buyer and willing-seller basis and comprises:

(a) RMB156.7 million (approximately S$29.3 million), after taking into account, inter-alia, the agreed value of the Property at RMB2,375 million (approximately S$443.7 million); and

(b) assignment of the shareholders’ loans of RMB375 million (approximately S$70 million) owing by Keisha to the Vendors.

Based on the consolidated management accounts of Keisha as at 30 June 2011, the net tangible assets of the Acquired Interests is approximately S$43.9 million.

Following the Acquisition, Keisha has become an indirect wholly-owned subsidiary of CapitaLand. CapitaLand’s effective interest in the Property has increased from 58.3% to 73%. The Acquisition is not expected to have any material impact on the net tangible assets or earnings per share of the CapitaLand Group for the financial year ending 31 December 2011.