Published July 13, 2009

KepLand offering 29 cents a share to delist Evergro

Investors can opt for 1 KepLand share for every 7 Evergro shares they own

By CHEW XIANG

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KEPPEL Land yesterday said it will pay 29 cents a share to delist Evergro Properties, its China unit.

Looking good: Evergro is building an apartment complex in Jiangyin city, which when completed in 2013 should also include retail and office buildings

The price is a 16 per cent premium over Evergro's last traded price on Friday of 25 cents a share.

Shareholders can also opt for one new Keppel Land share for every seven Evergro shares they own, Keppel Land said.

Evergro stock has rebounded sharply in the past three months since reaching a year-low of 10.5 cents in mid-March.

Keppel Land now owns 85.4 per cent of Evergro and will have to pay $54 million if all other shareholders choose to sell for cash. The voluntary offer values Evergro at $368.2 million.

Keppel Land now owns 85.4 per cent of Evergro and will have to pay $54m if all other shareholders choose to sell for cash. The voluntary offer values Evergro at $368.2m.

'By combining the operational expertise, industry knowledge and extensive networks of both companies, Keppel Land will be in an even stronger position to capture opportunities and growth in China,' said Kevin Wong, group chief executive officer of Keppel Land.

'It provides us with a stronger platform to maximise the potential of our existing portfolio and collective strengths as we continue to grow Keppel Land as the choice developer of homes in China.'

Evergro said it will appoint an independent financial adviser to advise the board on the exit offer.

Merrill Lynch has been appointed to advise Keppel Land on the offer.

The delisting proposal will delay Evergro's planned results announcement for its April-June second quarter, the company said.

This is so that the results can be reviewed by its auditor and financial adviser.

Evergro said it will release its financial results and reports from its auditor and financial adviser 'in due course but no later than Aug 14'.

Evergro, the former Dragon Land, reported net profit of $389,000 for the quarter ended March 31, or 0.03 cents per share.

Sales fell 39 per cent to $5.7 million, from $9.4 million a year ago. It had net asset value of 16.97 cents a share.

For its 2008 financial year, it posted net profit of $545,000, up from $196,000 the previous year, while revenue rose 9.8 per cent to $43.63 million.

As at March 31, the company holds cash of $134.6 million, after a rights issue last year raised about $137 million.

It had announced a three for two rights issue on May 30 and also a capital reduction to write off accumulated losses of $36.5 million.

But only three-quarters of the rights shares were taken up, leaving Keppel Land to subscribe for the rest.

Evergro has three residential projects and two golf courses in China.

It is developing a 300 hectare residential project within the Tianjin eco-city project, which comes with a golf course that has already opened.

It is also building an apartment complex in Jiangyin city, which when completed in 2013 should also include retail and office buildings.

A condominium project in Changzhou was completed in January and is 90 per cent sold.

Keppel Land is the property arm of local conglomerate Keppel Corp, with assets of $6 billion as at last year and a land bank of 100 million square feet across Asia and the Middle East.

Last month, it raised $708 million in a fully-subscribed, nine-for-ten rights issue at $1.09 a share. The stock closed at $2.10 on Friday.