CHIP Eng Seng Corp : C29 0% will acquire the 30 per cent stake it does not already own in a Maldives joint-venture (JV) company for US$1.3 million, the property company announced in a Tuesday (Dec 13) bourse filing.

 

The JV company, CES Tropical (Maldives), owns 99 per cent of an entity that holds the leasehold interest in a lagoon located in North Male Atoll, Maldives. Chip Eng Seng plans to develop the lagoon into a five-star resort.

 

Under the proposed deal, CES Hotels (Maldives) (CESHM), a wholly-owned unit of Chip Eng Seng, will buy the 30 per cent stake in CES Tropical from the seller, Tropical Developments. CESHM will also take over, for cash, the shareholder&rsquo s loans granted by Tropical Developments to CES Tropical of US$3 million.

 

With the deal, CES Tropical will be fully owned by Chip Eng Seng. The latter will have full control over the development of the lagoon and can manage the corporate affairs of CES Tropical more efficiently, the company said.

 

&ldquo The company has adequate resources (including financial) to proceed with the development of the lagoon without a joint-venture partner. Going forward, the proposed acquisition will also allow the company to account for the full share of the future value of the resort to be developed in the lagoon,&rdquo it added.

 

The deal is not expected to have a significant impact on Chip Eng Seng&rsquo s net tangible assets and earnings per share for the financial year ending Dec 31.

Between Dec 5 and 7, Chip Eng Seng Corporation : C29 0% non-executive chairman and non-independent and non-executive director Celine Tang bought 13,908,000 shares at 75 cents per share. With a consideration of S$10,431,000, this increased her total interest in the property player from 47.25 per cent to 49.02 per cent.

 

Back on Dec 2, Tang and her husband Gordon Tang revised the mandatory conditional cash offer to acquire the property player to 75 cents per share, a three-cent or 4.2 per cent improvement over the initial offer of 72 cents per share.