CapitaLand divests remaining Australand stake for S$970m

Property developer locks in S$35.7m net gain.

CapitaLand announced the sale of its 39.1% stake in Australand at an average price of A$3.75 per share, which will result in a sale of S$970.1m and result in a net gain of S$35.7m, reports OCBC Investment Research.

The research firm said it views the sale positiively since this could enable a special dividend later in the year, benefiting shareholders. It will also help simplify the group's structure and funnel capital into key markets like Singapore and China.

Here's more from OCBC Investment Research:

CapitaLand announced this morning that it has placed out its remaining 39.1% stake in Australand at an average price of A$3.75 per share, which represents a 3.6% discount from its last traded price and a 5.3% premium from last reported NTA. The sale will raise total proceeds of S$970.1m and result in a net gain of S$35.7m. The group noted that it conducted a partial sale in Nov-13 to improve trading liquidity, which subsequently provided an opportunity for the group to sell its remaining AustraLand stake at a more favorable valuation closer in line with that of peers.

We have a favorable view on this action and believe that the market will likely take this positively as well, given the possibility of a special dividend from the sale proceeds later this year. Strategically, this divestment will further simplify the group’s structure and enable management to recycle capital into key markets - Singapore and China. The sale is estimated to further boost the group’s cash holdings to approximately S$6.9b and reduce gearing to about 29%.