Singapore-based multinational group Keppel Corp has announced its intention to divest 70% interest worth VND2.3 trillion (US$99.67 million) in Dong Nai Waterfront City through its wholly-owned subsidiary Keppel Land to local property developer Nam Long Investment Corporation, said the company in a statement.
Keppel Land, Keppel's real estate arm, is currently in the process of taking over complete control of Dong Nai Waterfront City from its current joint venture partner in the project through a demerger.
Keppel Land will retain a 30% stake in the project after the sale of a 70% stake to Nam Long.
Dong Nai Waterfront City has been granted the right to develop a township on 170 hectares of land in southern province of Dong Nai. Dong Nai Waterfront City also currently holds a 28-ha plot of land which is excluded from the proposed divestment, said the company.
The deal is conditional upon certain precedent conditions being fulfilled, such as the completion of the demerger and regulatory approval.
The consideration will be paid in tranches. The unaudited net asset value attributable to the sale stake was approximately US$57 million as of December 31, 2018.
According to a filing to the Singapore Exchange, Keppel Corp said that this is in line with Keppel Land's strategy to recycle assets to seek higher returns. The funds generated will be used to pursue other opportunities in Vietnam.
Last March, Keppel Land acquired the remaining 10% stake in Jencity Limited, which holds Saigon Sports City, for approximately US$11.4 million.
Saigon Sports City project is a 64-hectare township that Keppel Land is developing in the prime location of District 2 in Ho Chi Minh City, in collaboration with Keppel Urban Solutions.
The total development cost for Saigon Sports City is projected to be more than US$500 million.