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Friday, August 7, 2009

Hap Seng buys stake in Menara Citibank

Hap Seng Consolidated Bhd today signed an agreement with CapitaLand Ltd and Amsteel Corp Bhd to acquire their entire shareholding in Inverfin Sdn Bhd.

The acquired shares represent a 50 per cent stake in Inverfin, which in turn owns Menara Citibank, a 50-storey office building in the Kuala Lumpur City Centre.

Hap Seng's group managing director Datuk Edward Lee Ming Foo said the acquisition will be funded by new bank borrowings and internally generated funds.

The group has proposed to obtain bank borrowings for up to RM200 million to finance the proposed acquisition, he said in a statement today.

The acquisition consideration of the Inverfin shares from CapitaLand and Amsteel is based on 50 percent of the net asset value of Inverfin as at June 30, 2009, taking into consideration the agreed property value of Menara which is fixed at RM607,448,952.

With the acquisition, the gearing ratio of Hap Seng is expected to increase marginally from 1.06 to 1.14 based on its audited accounts as at Dec 31, 2008.

According to Lee, the demand for prestigious office space in the heart of the Golden Triangle has not waned despite the global economic downturn.

"Based on our experience in the market, we expect demand to remain robust, if not improve, while supply is naturally kept limited in super-prime areas such as these," he said.

Menara Citibank sits on a parcel of freehold land measuring 12,700 square metres and has a net rentable area of 68,000 square metres.

"The unique propositions of Menara Citibank offer both the potential for rental growth as well as capital appreciation," Lee said.

"This will bode well for our group in terms of sustained recurring income and long-term value for our property holding and development division," he said.

By Bernama

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