SINGAPORE (Dec 28): Soon Lian Holdings, the supplier of aluminium alloy products, is purchasing a single-storey detached factory at 6 Tuas Lane from Halliburton Far East for $7.8 million, which is subject to a goods and services tax (GST) of $546,000.
The building has an aggregate built-in area of approximately 4,800 sqm and a land area of approximately 9,800 sqm.
It is leased from Jurong Town Corporation (JTC) for a term of 30 years commencing from 1 January 2008, and hence has remaining leasehold of about 20 years.
Based on the terms of its agreement with Halliburton, 6 Tuas Lane will be sold together with two cranes located at the property, and with vacant possession in its current state.
Completion of the transaction will also require written approval from JTC for Soon Lian to sublet part of the property to Halliburton for a period of one year with the option to renew for a further term of one year at $2,500 per month (excluding GST), as well as Soon Lian’s use of the property as “storage and fabrication and aluminium alloy material”.
An EGM will be held to seek shareholder approval, with the date to be announced in due course.
In a Thursday announcement, Soon Lian says that the built-in area of the factory, which is approximately 39% smaller than the group’s existing premises at 9 Tuas Avenue 2 is suitable and sufficient for its current operations and therefore would serve as an appropriate replacement.
Soon Lian is currently in the midst of selling its existing Tuas premises as it does not require the entire space available there, according to the group.
For illustrative purposes, it is estimated that Soon Lian’s net tangible assets (NTA) per share would have increased to $26.83 compared to $25.48 previously should the proposed purchased have been completed as at end-2016.
This would have brought the group’s FY16 loss per share up to 0.82 cents from $2.25 previously, and gearing down to 0.48 times from 0.78 times.
This story, written by Michelle Zhu for The Edge Singapore, first appeared on Dec 28.