The Pines club on Stevens Road is expected to make way soon for a new 735-room hotel housed in two eight-storey blocks, as well as a couple of two-storey commercial buildings, people familiar with the matter told TODAY, following the sale of the property to “shoebox apartment king” Ching Chiat Kwong of Oxley Holdings for S$318 million.
A four-storey clubhouse with a basement will replace the existing 30-year-old clubhouse that currently has about 1,500 members, the sources said. The sale by businessman Peter Kwee’s Exclusiv Resorts to Oxley Holdings’ subsidiary Oxley Gem comes after months of speculation over the future of the club.
Several businessmen were said to have been interested in buying over the premises from Mr Kwee, who bought the club in 2002 for just over S$100 million from developer Chng Heng Tiu, who had defaulted on a debt using the club as a collateral. At one time, there was even talk of the premises — sited on about 18,500 sq m of land — being converted into a condominium development.
As it will be the Oxley group’s first hotel — at present it is involved in residential, industrial and commercial properties — the company will be convening an extraordinary general meeting (EGM) to seek shareholder approval for the proposed development, which has been given provisional approval by the Urban Redevelopment Authority.
Shareholders will be notified later on the date of the EGM.
According to Oxley’s stock exchange filing last Friday, the purchase price was arrived at “after taking into account current market prices of properties in the surrounding area and the company’s assessment of the property’s redevelopment potential”. No full valuation has been carried out.
The company has paid a sum of S$10 million for the option to purchase, according to the filing. Another S$21.8 million will be paid upon exercise of the option, which will be done within a week of getting Oxley’s board approval, while the remainder of the purchase price will be paid on completion of the acquisition that is expected to take place around July 1.
The club’s existing members have been offered the choice of temporarily using the facilities of Mr Kwee’s Laguna National Golf and Country Club as non-golfing members and paying its subscription fees, or keeping their membership on hold for the three years that construction of the development is expected to take, according to a letter to Pines members. Those accepting the latter offer will not have to pay subscriptions for the three years and will have their 30-year membership extended by three years.
The letter to members pointed out that the club had been losing money over the last 10 years amid a dwindling membership. Membership fees for the club have plummeted from a peak of S$40,000 in the 1990s to less than S$6,500 at present, including the S$4,000 transfer fee.
Oxley, which as at the end of June last year had net debt of about S$800 million, added that the purchase would be funded by internal resources, bank borrowings, as well as S$100 million in 6-per-cent guaranteed bonds due in 2015, of which S$50 million will be redeemed after the first year.
For its financial year ended June 30, 2012, Oxley reported a net profit of S$16.9 million on revenue of S$159.4 million. But for the half year ended Dec 31, 2012, it produced S$109.8 million in revenue and profit of S$18 million.
Source : Today – 22 Mar 2013