3 February 2018
Macau Property Opportunities Fund Limited
("MPO" or the "Company")
MPO Enters into Formal Contract to Sell Senado Square Project for
US$102.3 Million
Macau Property Opportunities Fund Limited, managed by Sniper Capital Limited, today announces that it has conditionally agreed to sell its Senado Square retail redevelopment project to Ardent Success Limited and City Universe Limited (together the "Purchaser"), for HK$800 million (c. US$102.3 million)* (the "Transaction"). Senado Square is held through a special purpose company within the Company's group and the sale will be effected through the sale of the issued share capital of that company.
The sale price represents a premium of 14% to the property's valuation of HK$703 million (c. US$90.0 million) as at 31 December 2017 and a gain of 541% over the acquisition cost of US$15.96 million in October 2007. This translates to a return on investment of 469% and an internal rate of return of 20%. For the 12 month period ended 30 June 2017, no profits were attributed to Senado Square given it is and remains a development asset.
The disposal of Senado Square forms part of the Company's commitment to realising asset values and returning cash to shareholders as soon as reasonably practicable. All potential divestment options for the Company's remaining assets are continuing to be assessed with the goal of maximising exit values.
Transaction Terms
Under the terms of a promissory agreement of assignment of shares and shareholder loans ("Promissory Transfer Agreement"), entered into by certain subsidiaries of the Company (the Company and its subsidiaries being the "Group"), the Group is entitled to receive, by no later than 7 February 2018, a deposit totalling HK$15 million (c. US$1.9 million), representing c.1.9% of the agreed sale price, and will receive a net payment of HK$705 million (c. US$90.2 million) representing c.88.1% of the agreed sale price, on completion of the Transaction, which is expected on or before 29 March 2018 (subject to shareholder approval of the Transaction having first been received).
HK$80 million (c. US$10.2 million), representing 10% of the agreed sale price, will be pledged as a bank guarantee for a period of six months after the completion date. This will be released to MPO thereafter, provided that no past debts, taxes or miscellaneous fees and payments arise during the six-month period.
Upon the expiry of the bank guarantee, MPO and one of its Macanese subsidiaries will jointly provide a corporate guarantee of HK$20 million (c. US$2.6 million) to insure the Purchaser against the same items as above for a further period of six months.
Under the terms of the Promissory Transfer Agreement, the Company is required to pay HK$15 million (c. US$1.9 million) compensation, in addition to the return of an amount equal to the deposit paid, to the Purchaser in accordance with local law and practice should the Group fail to comply with its contractual obligations (including as to completion of the Transaction). The Group has also agreed not to sell or agree to sell Senado Square and its Macanese holding company to another purchaser within a period of 10 months from the Promissory Transfer Agreement date of 2 February 2018 (should the Transaction not proceed through the fault of the Group).
In line with its divestment strategy, the Company expects to return cash to shareholders from the disposal of Senado Square in the form that the Board consider is most appropriate, subject to the retention of sufficient working capital for the Company's ongoing operation.
Shareholder Approval
The Company intends to send an explanatory circular to its shareholders and seek their approval for the Transaction on the terms of the Promissory Transfer Agreement (and any related or ancillary documentation to be entered into pursuant to the Transaction), on the basis it constitutes a class 1 disposal for the purposes of the UK Listing Rules. A further announcement will be released by the Company upon publication of the explanatory circular.
About the Project
Senado Square is a retail redevelopment site with a freehold tenure, located in Macau's prime UNESCO-listed shopping precinct. Once completed, the site has the potential to offer c.70,000 square feet of modern retail and F&B space.
* Based on a US$/HK$ exchange rate of 7.82 as at 1 February 2018.
This announcement contains inside information.
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About Macau Property Opportunities Fund
Macau Property Opportunities Fund Limited is a closed-end investment company registered in Guernsey and is the only quoted property fund dedicated to investing in Macau, the world's largest gaming market and the only city in China where gaming is legalised.
Listed on the London Stock Exchange's main market, it is also a constituent stock of the FTSE All-Share and FTSE SmallCap indices.
Launched in 2006, the Company targets strategic property investment and development opportunities in Macau. Its current portfolio comprises a mix of prime residential and retail property assets that are valued at US$436.2 million as at 30 September 2017.
The Company is managed by Sniper Capital Limited, an Asia-based property investment manager with an established track record in fund management and investment advisory.
For further information:
Company Registration Number 44813
Website: www.mpofund.com
Manager
Sniper Capital Limited
Doris Boo
Tel: +65 6222 1440
Email: [email protected]
Corporate Broker
Liberum Capital
Richard Crawley / Richard Bootle / Jonathan Wilkes-Green / Henry Freeman
Tel: +44 20 3100 2222
Company Secretary & Administrator
Estera International Fund Managers (Guernsey) Limited
Kevin Smith
Tel: +44 14 8174 2742
Stock Code:
London Stock Exchange: MPO
LEI
213800NOAO11OWIMLR72
