Asian Growth Properties Ltd., in a proposed reorganization, entered into a conditional sale agreement to offload the entire issued share capital of Benefit Strong Group Ltd., or BSGL, to majority shareholder S E A Holdings Ltd. for HK$8.91 billion.
BSGL is a wholly owned subsidiary of Asian Growth Properties and holds all the company's assets and liabilities outside China: a commercial property at 20 Moorgate in London, the Crowne Plaza Hong Kong Causeway Bay in Hong Kong, bank balances and cash, and short-term treasury investments.
Additionally, the company is seeking shareholders' approval for a special dividend payment of HK$10.35 per share to its shareholders, which is subject to completion of the sale. It is expected to be paid May 10.
Meanwhile, shareholder Nan Luen International Ltd. agreed to a share exchange offer, qualifying shareholders of Asian Growth Properties to exchange their shares for S E A shares. As a result, Nan Luen will become a majority shareholder of both the Asian Growth and S E A.
Asian Growth Properties said the reorganization will see the company retain ownership of four assets in China. It noted that the original intent for the company when it was established in 2006 was to become a Hong Kong- and China-focused property investment and development company, and the London listing was to raise additional equity to aid its growth plan. However, the 2008 financial crisis prevented the company from carrying out an equity fund raising, adding that the price of its shares in London has not reflected the good performance of its business and NAV per share.
The reorganization, the company said, will allow it to narrow the discount between NAV per share and its share price, through increasing its free float and liquidity.
The company's shareholders are scheduled to vote on the proposal at an April 21 special general meeting. The sale is expected to close May 4.