BREADTALK GROUP LIMITED (Incorporated in the Republic of Singapore) (Company Registration No.: G)

Transcription

1 BREADTALK GROUP LIMITED (Incorporated in the Republic of Singapore) (Company Registration No.: G) HEADS OF AGREEMENT TO INVEST IN PRE 8 INVESTMENTS PTE. LTD., WHICH HAS IN OCTOBER 2011 ENTERED INTO AN AGREEMENT TO ACQUIRE CHIJMES 1. INTRODUCTION The Board of Directors of BreadTalk Group Limited (the "Company" and together with its subsidiaries, the Group ) wishes to announce that Imagine Properties Pte. Ltd. (a wholly-owned subsidiary of the Company) ( IPPL ) has today entered into a heads of agreement ( HOA ) with, inter alia, PRE 8 Investments Pte. Ltd. ( PRE 8 ) to subscribe for S$18,000,000 in principal amount of junior bonds (the Junior Bonds ) to be issued by PRE 8 or its holding company (the Issuer ) and the attached 72 redeemable preference shares in the capital of the Issuer (the Preference Shares ) at S$0.10 per Preference Share (collectively, the Proposed Investment ). 2. OVERVIEW OF THE PROPOSED INVESTMENT 2.1 Information on the acquisition of CHIJMES PRE 8 had on 27 October 2011, entered into a property sale and purchase agreement with HSBC Institutional Trust Services (Singapore) Limited, in its capacity as trustee of Suntec Real Estate Investment Trust, to purchase CHIJMES (the Property ) at a consideration of S$177.0 million. CHIJMES is strategically sited along Victoria Street in the Downtown Core, within Singapore s Central Business District. It enjoys prominent frontage along Victoria Street, North Bridge Road and Bras Basah Road and is situated across the City Hall Mass Rapid Transit Interchange Station (serving the North-South and East-West Lines). CHIJMES, an iconic heritage landmark, is an award winning gazetted national monument and is also recognised by UNESCO as an Asia Pacific Culture Heritage Conservation Building. It is also classified as a restored conservation building by Urban Redevelopment Authority of Singapore. CHIJMES has a net lettable area (NLA) of 79,794 sq ft and includes two gazetted national monuments, Caldwell House and Chijmes Hall (the former CHIJ Chapel), along with several conservation buildings and 96 carpark lots. It is situated on a site with a remaining lease of about 79 years, with tenants including Lei Garden Restaurant and Watabe Singapore Pte Ltd. 2.2 Information on PRE 8 PRE 8 is a private company constituted in Singapore in September It is a special purpose vehicle which will hold the Property. The current sole shareholder of PRE 8 is Perennial Real Estate Pte. Ltd. ( PREPL ). However, the entire issued ordinary share capital of PRE 8 may be directly or indirectly owned by a corporate services provider. 1

2 2.3 Information on the Proposed Investment Pursuant to the terms of the HOA, IPPL has agreed to subscribe for S$18,000,000 (the Subscription Amount ) in principal amount of Junior Bonds, which will be stapled together with 72 Preference Shares (issued at S$0.10 each). The Junior Bonds will be secured by, amongst others, a mortgage over CHIJMES. The payments of principal and interest on the Junior Bonds will be subordinated to the payments of principal and interest on external bank borrowings to be obtained by the Issuer. The Junior Bonds (together with the Preference Shares) are expected to be issued sometime in January 2012 and in any case, not later than 29 February 2012 (the Long Stop Date ). The tenor of the Junior Bonds is expected to be either 3 years or 5 years. 2.4 Subscription Amount Upon execution of the HOA, IPPL has paid S$12 million in aggregate, as a deposit (the Deposit ) to PRE 8 or its order, which Deposit is to be applied towards satisfaction of part of the Subscription Amount due from IPPL for the issue of the Junior Bonds to IPPL. IPPL will pay S$7.20 for the 72 Preference Shares to be attached to the Junior Bonds. The balance of the Subscription Amount of S$6 million is to be paid by freely transferable funds to PRE 8 or its order on the date of issue of the Junior Bonds and the Preference Shares. Under the HOA, in the event the subscription agreement to be entered into between the Issuer and IPPL for its subscription of the Junior Bonds and Preference Shares is not entered into by the Long Stop Date or the Junior Bonds and the Preference Shares are not issued to IPPL by the Long Stop Date, PRE 8 shall refund the Deposit to, and PREPL shall procure PRE 8 to refund the Deposit to, IPPL within 14 business days after the Long Stop Date without any interest thereon. If the Deposit is not refunded by PRE 8 within 14 business days after the Long Stop Date, PRE 8 shall pay to IPPL default interest at the rate of 2% above a bank prevailing prime rate. The Subscription Amount is proposed to be funded by internal resources and bank financing. 3. RATIONALE FOR THE PROPOSED INVESTMENT The Proposed Investment would allow the Group to add value to a strategically located iconic heritage commercial asset that sits right in the downtown core of the Singapore Central Business District (CBD). The Group may selectively showcase some of its brands, including new concepts, in this Property as appropriate. The Group understands that PRE 8 intends to spend some S$40 million to rejuvenate the Property. The Group expects to benefit from this investment through both an expansion in its business in partnership with the manager of the Property, as well as through value extraction of the Property based on the proposed asset enhancement. The Proposed Investment is in partnership with a consortium of other investors, with Perennial (Singapore) Retail Management Pte. Ltd. ( PSRM ), a wholly-owned subsidiary of PREPL with the relevant retail management expertise and track record, as the proposed property manager of CHIJMES. IPPL has also invested in 112 Katong which is also managed by PSRM. The Group is encouraged by its November 2009 investment in 112 Katong, which is now nearing completion and has already secured an occupancy rate of approximately 95% as at October

3 CHIJMES is expected to be transformed into a vibrant food & beverage and entertainment alternative for locals and tourists in the heart of downtown Singapore. Going forward, the Group will carefully consider investment opportunities that are strategic to upstream integration along the retail supply chain. 4. FINANCIAL EFFECTS For illustrative purposes only, the proforma financial effects of the Proposed Investment on the share capital of the Company, the net tangible asset value ( NTA ) per ordinary share in the capital of the Company (the Share ) and earnings per Share ("EPS"), based on the audited consolidated financial statements of the Group for the financial year ended 31 December 2010 ( FY2010 ) and the terms in the HOA, are set out below:- (a) Share Capital The Proposed Investment will have no impact on the number of issued Shares of the Company. (b) NTA per Share Assuming that the Proposed Investment had been completed on 31 December 2010, it would have no impact on the NTA per Share of the Group. (c) EPS Assuming that the Proposed Investment had been completed on 1 January 2010 and was funded by internal resources and bank financing the impact of the Proposed Investment on the EPS of the Group would be as follows:- Profit after income tax and minority interests for FY2010 (S$ 000) Weighted average number of issued and paid-up Shares ( 000) Before the Proposed Investment After the Proposed Investment 11,266 11, , ,052 EPS for FY2010 (cents) RELATIVE FIGURES ON THE BASES SET OUT IN RULE 1006 OF THE SGX-ST LISTING MANUAL Based on the audited financial statements of the Group for FY2010 the relative figures for the Proposed Investment computed on the bases set out in Rule 1006 of the Listing Manual of the Singapore Exchange Securities Trading Limited are as follows: 3

4 Bases under Rule 1006 Rule 1006(a) As at 31 December 2010 Net asset value Rule 1006(b) Net profits attributable to the Junior Bonds and Preference Shares Not applicable to an acquisition of assets For financial year ended 31 December Net profits of the Group (S$'000) 11,266 Size of relative figure 4.8% Rule 1006(c) Aggregate amount of consideration for the Proposed Investment (S$ 000) Market capitalisation (1) of the Company as at 3 November 2011 (being the last trading day immediately preceding the date of the HOA) (S$ 000) 18, ,583 Size of relative figure 12.54% Rule 1006(d) Number of equity securities to be issued by the Company as consideration for the acquisition compared with the number of equity securities previously in issue Not Applicable Note:- (1) The market capitalisation of the Company is based on 280,655,548 Shares in issue (excluding treasury shares) as at 3 November 2011 (being the last trading day immediately preceding the date of the HOA) and the weighted average price of the Shares transacted on the SGX-ST on the same date of S$ INTEREST(S) OF DIRECTORS AND CONTROLLING SHAREHOLDERS Dr George Quek Meng Tong, the Chairman and an executive director of the Company, is also a director of PRE 8. Save as disclosed in this announcement, none of the Directors of the Company has any interest, direct or indirect in the Proposed Investment and the Company has not received any notification from any controlling shareholder that it has any interest, direct or indirect in the Proposed Investment. 7. DOCUMENT FOR INSPECTION A copy of the HOA is available for inspection at the registered office of the Company at 171 Kampong Ampat, #05-05 KA FoodLink, Singapore during normal business hours for a period of 3 months from the date of this Announcement. 4

5 By Order of the Board of the Company Tan Cher Liang Company Secretary 4 November