Singapore sovereign wealth fund Temasek will emerge as majority shareholder in an enlarged CapitaLand Group following anticipated shareholder approval of its S$11bn (€7.2bn) merger with Ascendas-Singapore on Friday.
Post-transaction, Temasek, which currently owns about 40.8% of CapitaLand’s shares, will increase its holding to 51%.
CapitaLand and Ascendas-Singbridge announced in January that they had agreed to merge to form Asia’s largest diversified property group, with assets under management of S$123bn.
Under the terms of the agreement, Temasek, which owns Ascendas-Singbridge, will effectively receive S$6bn. Half of that will be in cash and $3bn in new CapitaLand shares at S$3.50 per share. CapitaLand will take over Ascendas-Singbridge’s debt.
CapitaLand’s other existing substantial shareholders are BlackRock and PNC Financial Services Group. Today, they each hold 7% stakes.
CapitaLand’s shareholders will meet on Friday in an extraordinary general meeting to approve the transaction.
In a “dialogue session” with the Securities Investors Association in Singapore, CapitaLand’s chief financial officer Andrew Lim said: “We have amassed liquidity of almost S$8bn. This includes cash we have on hand and loans we have secured from banks.
“We will be paying S$3bn in cash for the transaction. We have S$2.2bn to be paid over the course of the next 12 months.
“We are left with almost S$3bn of remaining liquidity for a rainy day and to fund potential opportunities that may emerge in the next 12 to 15 months.”
Also speaking at the session, Lee Chee Koon, CapitaLand’s president and group CEO, said the merged group would focus on deploying the bulk of its capital into Singapore China, Vietnam and India as it capitalises on its newly-acquired capabilities in logistics, industrial and business and IT parks.
He said acquisition of Ascendas-Singbridge’s new-economy properties would allow CapitaLand to step up in presence in the three sectors.
“As a merged entity, we will be organised by country, mainly Singapore, China, India, Vietnam and other developed markets,” said Lee.
He had earlier told Singapore media that the group would allocate 80% of its capital to the four core Asian markets, and the remaining 20% into the US, Europe and Australia.
In India, he said, CapitaLand would also capitalise on Ascendas-Singbridge’s long-established presence there to access what will be a new market for the company.
Ascendas-Singbridge has S$2.6bn invested in business and IT parks, industrial facilities and logistics properties in India.
Lee said the group would also step up its lodging and fund management businesses.
CapitaLand has flagged further asset sales to recycle capital held in non-core assets for investment in better-performing asset classes.
Lee said that by the time of its EGM, the merged company, with a staff of 16,000 employees, would already have its future organisational structure in place.
“This will allow us to be fully operational from day one,” he said.