SPH announced that it will hold the 40% of the joint venture company, Memphis 1 and Keppel will hold the remaining shares. Memphis 1 has an option to acquire SPH’s leasehold in 82 Genting Lane for S$50 million. The sale of the property is expected to be completed by July 17. When the deal is completed, SPH will effectively have disposed of 60 percent of its stake.
According to the agreement, SPH will subscribe for S$1.4 million worth of Memphis 1 shares and Keppel will initially subscribe for S$2.1 million worth of Memphis 1 shares. Both companies will also undertake to contribute additional funds to Memphis 1. Based on SPH’s unaudited financial statements the disposal of the 60 percent stake in the property will result in a gain of S$25.5 million as the sale price is greater than the value of the property. SPH and Keppel share a common chairman: Lee Boon Yang who has abstained from all deliberations and decisions of both boards in connection with the proposed transaction.