METROPOLITAN Parking Pte Ltd, nominee for property management services provider LHN Group, has exercised an option to buy from Ottowest Pte Ltd a carpark property for S$26 million.
In a filing to the local bourse on Wednesday, LHN said the carpark property is located at Golden Mile Tower on Beach Road.
In exercising the purchase option, the group said Metropolitan Parking is required to pay a deposit amounting to 5 per cent of the purchase price.
It added that Metropolitan Parking’s internal resources would fund the purchase. This would be shared equally between its shareholders LHN Parking (GMT) Pte Ltd (LHN GMT) and GMTC Private Limited, and through Metropolitan Parking’s bank borrowings.
The operation and purchase of the carpark property will be undertaken by Metropolitan Parking, as agreed in a joint venture (JV) deal it had entered into on Wednesday with its two shareholders.
Until Metropolitan Parking gets the necessary regulatory approvals, LHN GMT and GMTC agree that the former will appoint LHN GMT or its nominee for the running and operation of the car park business.
Under the JV, LHN GMT and GMTC would contribute an aggregate of up to S$199,998 in equity capital in equal proportion by way of subscription for 199,998 new ordinary shares in the capital of Metropolitan Parking. This would mean that LHN GMT would continue to hold a 50 per cent stake in Metropolitan Parking.
LHN GMT intends to fund its portion through proceeds raised from the group’s IPO.
The group also said the board of Metropolitan Parking would comprise two directors – one to be appointed by LHN GMT and the other by GMTC. It added that the capital contribution and the JV are not expected to have any material impact on its earnings per share or net tangible assets per share for the current financial year ending Sept 30, 2016.