On 6 Feb 2014, Second Properties Ltd has entered into an option agreement to dispose all their properties at a price of $175,376,412, which is somewhat a premium to the total market value of $134,773,500.
Rationale
The proposed disposal is expected to unlock equity value tied up in the real estate for a number of years and the company will use the proceeds for:
1.) 39% of the proceeds will be used to repay all the debts, bringing the gearing to 0.
2.) 6% of the proceeds will be used to distribute dividends to shareholders.
3.) 55% of the proceeds will be used to redeploy into business operations which can generate a higher return.
Thoughts
I thought it's a pretty good deal.
Based on the market value alone they probably would have made significant profits from it. Now with a premium proceeds, they have gained easily another (Read more...)
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