SINGAPORE, May 22 (IFR) - Singapore-listed Vibrant Group has agreed to sell stakes in REIT manager Sabana Investment Partners and Sabana Shari’ah Compliant Industrial Real Estate Investment Trust for a combined S$62.2m (US$45.1m), which it will use to reduce debt.
The company secured a sale and purchase agreement on May 22 with E-Shang Infinity unit InfinitySub to buy Vibrant's 51% stake in SIP for around S$21.8m. Another agreement was sealed on the same day for Vibrant and subsidiary Singapore Enterprises to sell a combined stake of nearly 8% in Sabana REIT to E-Shang Infinity, for around S$40.4m.
Net proceeds from the SIP sale and the Sabana REIT sale will come to S$21.75m and S$40.37m. Vibrant said in an SGX statement that it would use proceeds from the SIP sale to partially redeem an outstanding S$66m 7.5% bond due 2020, while the Sabana REIT sale's proceeds will repay an existing bank loan from United Overseas Bank. There will be a surplus balance of S$19.5m after the debt repayments.
“The transactions will enable the group to minimise its liabilities, strengthen the group's financial and liquidity positions as there would be a positive impact on the working capital and gearing of the group,” said the Vibrant statement.
The company said the stake disposals will not affect its core businesses, which are in integrated logistics solutions and freight and logistics services, as well as in real estate and financial services.
Investors holding the 2020s had granted consent to Vibrant in October last year to amend certain terms to avoid breaching covenants. They also approved the sale of shares in SIP as long as the proceeds would be used to redeem the notes.
(Reporting by Kit Yin Boey; Editing by David Holland)
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