Bought by Golden Compass (BVI) which is fully owned by AEW Real Estate
Oxley Holdings has sold Chevron House for S$1.025 billion. The property developer announced this on Tuesday. Interestingly this development comes just 16 months after they had acquired this Raffles Place office building for S$660 million.
The developer had made an announcement on April 29 where it stated to have entered a SPA (sale-and-purchase agreement) with Golden Compass (BVI).
As per this agreement Golden Compass would acquire all interests in Oxley Beryl, Oxley’s wholly-owned subsidiary and also take over bank loans totalling to S$1.025 billion
The 32-storey commercial development, Chevron House has office space in 27 levels and a retail podium that occupies five levels.
The NLA (net lettable area) for this property stands at 261,280 square feet. Interestingly the developer as late as February in a corporate presentation had revealed plans of expanding the net lettable area to 374,165 sq ft or 43% increase from the current NLA if it could get permission from the authorities.
Oxley under this deal would earn S$2,739.43 psf on the increased net lettable area going by the sale price of S$1.025 billion.
The site has 70 years remaining on its 99-year lease tenure that started in December 1989. According to the company this sale is expected to help restructure their assets and also improve net tangible assets per share and improve earnings per share for the financial year that would end on June 30.
The company also said that it would carry on with the on-going additions, alterations and enhancement they has been going on since March 1 before they complete the final sale.
Oxley further added that the decision to sell Chevron House was arrived after both the parties saw value in the Oxley Beryl deal and their respective interests were served.
As per the terms agreed upon, Golden Compass shall pay S$210 million once the initial sale is completed and it will take control over 82.35% of the paid-up and issued capital of Oxley Beryl.
Once the sale is finally completed, they would next discharge bank loans owed by Oxley Beryl and also pay the balance of the consideration.
This will be followed by the transfer of Oxley Beryl’s remaining shares to Golden Compass. It is estimated that final completion of the sale would take place once on-going works are completed and divestment of the retail and banking units.
There are media reports that Golden Compass would take over Oxley’s borrowings of around S$450 million that was used during the Chevron House’s acquisition in 2017.
This move will help Oxley reduce its debt by the same amount. The Sale and Purchase Agreement also has clauses for retention sums that would only be release when certain conditions are fulfilled.
Oxley didn’t share those conditions or the amount of retention sums. Shareholders’ approval about this sale in Singapore Exchange is expected to be one of the conditions in the agreement.
AEW the US based real estate fund fully owns Golden Compass. In the month of March AEW has sent an Expression of Interest to Oxley for acquiring Chevron House.
Oxley has often been seen as a highly geared company in Singapore but in the recent months it has shifted its attention to deleveraging.
An official for the company said that they are committed to bringing down the net debt-to-equity to 1 by the end of the year from the 2.55 times it was towards the end of 2018.
The company also has S$300 million worth of bonds maturing in November this year and another S$150 million for May 2020.
As a part of its commitments towards reducing debts the company has been aiming quick turnover for its projects as well as selling some of its assets.
Oxley Holdings is also planning to sell Novotel and Mercure hotels located in Stevens Road.
It is being reported that they have hired a marketing agent for the sale of hotels and interesting had walked out of an S$950 million deal in March.
It is being reported that investors from Hong Kong have shown interest in the property.