Progress update and Result of AGM

Aseana Properties Limited

("Aseana" or the "Company")

 

 

Progress update on the divestment of the portfolio

and

Result of AGM

 

Aseana Properties Limited (LSE: ASPL), a property developer in both Malaysia and Vietnam which is listed on the Main Market of the London Stock Exchange, announces an update on the divestment of the Company's assets which commenced following a Shareholder vote on 22^nd June 2015.

 

Since that date, the Board of Directors has been actively engaged with the Company's Development Manager in a process of orderly disposal of the Company's assets with the aim of completing that process by June 2018. The Directors have previously highlighted the difficult property market conditions prevailing in both Malaysia and Vietnam which affected the speed at which assets have been disposed of and which led them to the decision to use most of the proceeds from asset sales for the reduction of project related debts within the portfolio. During this period Aseana has sold assets for a total consideration of US$187.3m and project debt has fallen from the peak of US$229.4m as at 31 December 2013 to US$81.8m as at 31^st March 2017. The cash held by the Group on 31 March 2017 was US$18.4m.

 

Assets that have been sold during this period are as follows:

 

1.    Units at Tiffani and Seni Mont' Kiara for a total cash consideration of US$15.7m;

2.    The Company's entire stake in The Waterside Estates residential project, Ho Chi Minh City, Vietnam was sold on 24^th September 2015 for a total cash consideration of US$9.29m;

3.    The Company's entire stake in The Aloft Kuala Lumpur Sentral Hotel, Malaysia was sold on 23^rd June 2016 for a gross transaction value of RM418.7 million (approx. US$104.2 million);

4.    The Company's entire stake in Nam Long Investment Corporation, a residential property developer listed on the Ho Chi Minh Stock Exchange was sold in tranches between June 2015 and November 2016, for a total consideration of US$15.2m; and

5.    Seven land plots at the International Hi-Tech Healthcare Park in Binh Tan district in Ho Chi Minh for a total consideration of US$42.9m. The Company owns 72.3% of this Park.     

 

Throughout this period, construction of the RuMa Hotel and Residences located in Kuala Lumpur, which is 70% owned by the Company and which is the only asset in the Company still under construction, has been progressing well. Construction work on this forty floor building is now nearing completion and the handover of both the residential apartments to their purchasers and the luxury 253 suite hotel, which is to be managed by the Urban Resorts Concept Group based in Hongkong, is expected to commence during Q1 2018. The costs of construction of RuMa have largely been financed by pre-sales of the residences and hotel suites, 55.1% of which have been sold so far. 

 

The Directors believe that significant progress has also been made at both readying the remaining assets for sale, including reducing the operating losses at the City International Hospital in Ho Chi Minh City and the Harbour Mall Sandakan and Fours Points Sheraton Sandakan Hotel in Sandakan, East Malaysia, and marketing the assets to prospective buyers. The Directors note that property market and economic conditions have been improving recently in both countries, although there remain challenges in sectors of the market that the Company is invested in. The Development Manager is continuing to use their best efforts to dispose of all the remaining assets of the Company by June 2018. However, if it becomes likely that the Company will not be able to meet this stated target, a separate announcement will be made by the Company by Q1 2018 in respect of its plans beyond June 2018. 

In January 2017, the Company distributed US$10.0m to Shareholders via a tender offer to buyback 6.29% of the then outstanding shares at a price of US$0.75 per Share. The Directors intend to make further returns of capital as soon as possible following the completion of further asset disposals and the pay back of outstanding project debts. Further announcements will be made as soon as there is further clarity on the progress and timeline of these disposals.

 

As a result of the asset sales highlighted above, associated debt repayments and changes to the valuations of remaining assets, the Company's Net Assets and Realisable Net Assets as at 31st March 2017 were US$132.2m and US$178.8m respectively.

 

During the divestment period, the Directors have been reducing the costs of operating the Company wherever possible, and will continue to do so. In this regard, the Directors have resolved to reduce the costs of the Board by reducing the Directors fees by 25% with immediate effect for the period of July 2017 to June 2018.   

 

In addition, in order to get the Company ready for the discontinuation vote that is to be proposed to Shareholders at the AGM that will be held in June 2018, the Company and the Development Manager have agreed to reduce the notice period for termination of the Management Agreement from 12 months to 3 months with immediate effect (the "Amendment").

 

As a company whose shares are listed on the standard listing segment of the Official List of the UKLA, the Listing Rules applicable to closed-ended investment companies which are listed on the premium listing segment of the Official List of the UKLA do not apply to the Company.  However, as set out in the Company's prospectus dated 29 March 2007, the Company has adopted a related party policy which applies to any transaction which it may enter into with the Development Manager or any of its affiliates which would constitute a "related party transaction" as defined in, and to which would apply, Chapter 11 of the Listing Rules. In accordance with its related party policy, the Company's independent directors, being Mohammed Azlan Hashim, Christopher Henry Lovell, David Harris, John Lynton Jones and Gerald Ong ("Independent Directors"), having consulted with the Company's financial adviser, Nplus1 Singer Advisory LLP, consider that the terms of the Amendment are fair and reasonable insofar as the Company's shareholders are concerned, and accordingly the Independent Directors have approved the Amendment.

 

Separately, the Company announces that all resolutions were duly passed at its Annual General Meeting held on 3 July 2017. Further information on the resolutions and votes total report is available on the Company's website at the following links: http://www.aseanaproperties.com/documents.htm and http://www.aseanaproperties.com/voting-reports.htm respectively.

 

Copies of the resolutions (other than those concerning ordinary business) have been forwarded to the UK Listing Authority via the National Storage Mechanism and are available for inspection at http://www.morningstar.co.uk/uk/nsm.

  

 

For further information:

 

Aseana Properties Limited		Tel: +603 6411 6388
Chan Chee Kian		Email: [email protected]
N+1 Singer		Tel: 020 7496 3000
James Maxwell / Liz Yong (Corporate Finance) Sam Greatrex (Sales)
Tavistock Communications		Tel: 020 7920 3150
Jeremy Carey / James Verstringhe		Email: [email protected]

Notes to Editors:

 

London-listed Aseana Properties Limited (LSE: ASPL) is a property developer investing in Malaysia and Vietnam.

 

Ireka Development Management Sdn Bhd ("IDM") is the exclusive Development Manager for Aseana. It is a wholly-owned subsidiary of Ireka Corporation Berhad, a company listed on the Bursa Malaysia since 1993, which has over 50 years of experience in construction and property development. IDM is responsible for the day-to-day management of Aseana's property portfolio and the divestment of existing properties.