‘A purely in­vest­ment con­sid­er­a­tion’

> Sime Darby Prop­erty and SP Se­tia ex­plain in­volve­ment in project to re­de­velop Lon­don’s Bat­tersea Power Sta­tion

The Sun (Malaysia) - - SPEAK UP -

PETALING JAYA: In re­but­ting Parti Kead­i­lan Rakyat (PKR) de facto leader Datuk Seri An­war Ibrahim’s claim that their in­vest­ment in Lon­don’s Bat­tersea Power Sta­tion project was a “po­lit­i­cal de­ci­sion”, Sime Darby Prop­erty Bhd and SP Se­tia Bhd said in a joint state­ment yes­ter­day that it was purely an “in­vest­ment con­sid­er­a­tion” and the project was ac­quired via a com­pet­i­tive ten­der process in Septem­ber 2012 to­gether with the Em­ploy­ees Prov­i­dent Fund (EPF).

An­war was quoted as say­ing that pre­vi­ous govern­ment’s du­bi­ous in­vest­ments, in­clud­ing the Bat­tersea project, would be in­ves­ti­gated over al­leged use of pub­lic funds for project fi­nanc­ing.

The two devel­op­ers ex­plained that the site ac­qui­si­tion and the sub­se­quent costs of the Bat­tersea de­vel­op­ment have been fully funded by a com­bi­na­tion of eq­uity from the share­hold­ers to­gether with de­vel­op­ment debt pro­vided on com­mer­cial terms by a mixed group of nine Malaysian and in­ter­na­tional lenders.

“The £458 mil­lion de­vel­op­ment loan for Phase 1 has been fully re­paid ahead of sched­ule. The ini­tial cap­i­tal in­vested into the project by the devel­op­ers and the profit from the first phase is now be­ing rein­vested into de­vel­op­ing the sub­se­quent phases,” they added.

At present, Per­modalan Na­sional Bhd (PNB) and EPF to­gether own di­rectly and in­di­rectly 67% eq­uity in Bat­tersea. PNB holds ma­jor­ity stakes in SP Se­tia and Sime Darby Prop­erty, which jointly own 80% of the eq­uity in the de­vel­op­ment while EPF di­rectly owns 20% of the de­vel­op­ment.

In Jan­uary this year, the share­hold­ers and man­age­ment of Bat­tersea were con­sid­er­ing a di­vest­ment of the com­mer­cial as­sets and had ini­ti­ated con­ver­sa­tions with PNB and EPF with an es­ti­mated to­tal con­sid­er­a­tion of £1.608 bil­lion (RM8.6 bil­lion), which is sub­ject to fur­ther due dili­gence and on the ba­sis that the de­vel­op­ment is com­pleted and fully ten­anted.

The ex­clu­siv­ity pe­riod for the trans­ac­tion has been ex­tended till June 29, 2018 and the par­ties are work­ing to­gether to­wards com­plet­ing the pro­posed trans­ac­tion.

“As pre­vi­ously as­sured by all par­ties, the de­ci­sion to ex­plore the po­ten­tial re­or­gan­i­sa­tion of own­er­ship is purely an in­vest­ment con­sid­er­a­tion ini­ti­ated by the Bat­tersea board and man­age­ment team, to­gether with EPF and PNB.

“From the per­spec­tive of Sime Darby Prop­erty and SP Se­tia, as prop­erty devel­op­ers, the trans­ac­tion will en­able us to con­tinue to re­al­lo­cate cap­i­tal to other ar­eas of their de­vel­op­ment busi­nesses,” the prop­erty devel­op­ers stressed.

For PNB and EPF, it is a strate­gic op­por­tu­nity to se­cure own­er­ship of a “unique and iconic real estate as­set” that would be able to de­liver sus­tain­able in­come streams into the fu­ture to meet their re­spec­tive in­come needs. The trans­ac­tion is ex­pected to gen­er­ate an at­trac­tive long-term yield for in­vestors.

More than 99% of the res­i­den­tial units in the first phase, Cir­cus West Vil­lage, have been sold and work on the power sta­tion build­ing is in progress and is sched­uled to open to the pub­lic in late 2020.

The power sta­tion will also house 120 shops and restau­rants, event space and visi­tor at­trac­tions as well as 253 res­i­den­tial apart­ments, of which 90% have been sold.

Shares of Sime Darby Prop­erty and SP Se­tia re­bounded yes­ter­day, rising 4 sen or 3.3% and 5 sen or 1.7% to set­tle at RM1.25 and RM3.00.

Con­struc­tion cranes in oper­a­tion around Bat­tersea Power Sta­tion in the Nine Elms area of Lon­don in Oc­to­ber 2017.

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