Coliwoo Holdings Limited Announces Disposal of 80% Stake in Coliwoo PP Pte. Ltd. for S\$43.9 Million

Overview

Coliwoo Holdings Limited (“CHL”) has announced the disposal of its 80% equity interest in Coliwoo PP Pte. Ltd. (“CWPPPL”), a key subsidiary that owns and manages the Coliwoo Hotel Pasir Panjang, for an aggregate cash consideration of S\$43,900,000, plus a variable amount based on net asset value. The sale will be executed via a Share Purchase Agreement (“SPA”) with CWL Properties Pte. Ltd. (“Purchaser”), an independent real estate developer. The remaining 20% of CWPPPL will be sold by Globalpoint Far East Pte. Ltd. (“GPFE”), also an independent third party.

Key Transaction Details

• The transaction involves the sale of all 100,000 ordinary shares of CWPPPL (issued and paid-up share capital of S\$100,000).
• CHL will receive approximately S\$35.12 million (80% of the purchase price), plus 80% of the final net asset value (“Closing Net Asset”) of CWPPPL.
• The consideration was determined after arm’s-length negotiations and is supported by a recent independent valuation of the property at S\$43.5 million by Savills Valuation and Professional Services (S) Pte Ltd.
• The Purchaser paid a 1% earnest deposit (S\$439,000) upon execution of the term sheet, with further payments structured at closing.
• Payment structure includes discharging CWPPPL’s outstanding bank loans, repayment of shareholders’ loans and interest, and final payments to CHL and GPFE.
• Additional adjustments will be made based on the final net asset value as determined at completion, with positive or negative adjustments settled within 10 business days post-completion.
• Completion is targeted for 12 January 2026 or three business days after all conditions precedent are fulfilled, whichever is later.

Important Conditions Precedent and Terms

• All debts and liabilities of CWPPPL up to closing must be settled, except for the outstanding bank loan which will be discharged at closing.
• All necessary board and shareholder approvals must be obtained, including from CHL’s parent company, LHN Limited, as required under SGX Listing Manual.
• The property title must be delivered in good order, free of encumbrances, and satisfactory replies received from government authorities.
• No material adverse change must have occurred before closing.
• Limitation of liability for breach of warranties is capped at S\$2 million, except in cases of fraud or wilful misconduct. Claims below S\$100,000 are not actionable.

Post-Transaction Arrangements

• CHL (or its subsidiary) will enter into a six-year master lease rental agreement for the property post-sale, allowing continued operation of the Coliwoo Hotel Pasir Panjang as a co-living space.
• All existing tenancy and maintenance agreements will be assigned or novated to the new master tenant operated by CHL.
• CHL will remain entitled to rents and profits, and liable for expenses incurred up to the closing date. The Purchaser will be entitled to rent and liable for expenses thereafter.

Financial Impact and Shareholder-Relevant Information

• Net Tangible Assets: NTA per share is projected to increase marginally from 40.30 cents to 40.41 cents post-transaction.
• Earnings Per Share (EPS): EPS will decrease slightly from 4.82 cents to 4.62 cents following the sale, reflecting the loss of future profits from the disposed asset.
• Estimated Net Proceeds: CHL expects to receive about S\$15.3 million in net proceeds after loan repayments and related costs.
• Gain on Disposal: The anticipated gain from the transaction is approximately S\$0.3 million for the financial year ending 30 September 2026, as most fair value gains have already been recognised in prior years.
• Relative Figures: The sale constitutes a “discloseable transaction” under SGX Listing Manual, with the consideration amounting to about 13.05% of CHL’s market capitalisation (S\$269.1 million).
• Use of Proceeds: Funds will be used to repay working capital loans to LHN Group Pte. Ltd., and for general working capital, including new projects and ongoing compliance costs.
• No Change to Share Capital: As the transaction does not involve the issuance of new shares, there is no dilution for existing shareholders.
• No Change in Board Composition: No new directors will be appointed as a result of this transaction.
• Directors’ Interests: No director or substantial shareholder (other than in their official capacity) has any interest, direct or indirect, in the transaction.

Strategic Rationale and Potential Impact

The disposal is part of CHL’s “capital recycling” strategy, aimed at monetising property assets at opportune times and redeploying capital into higher-return projects. The transaction is expected to strengthen CHL’s balance sheet, increase liquidity, and facilitate future growth and expansion. This move may be price sensitive, as it directly affects the company’s asset base, future earnings, and cash flow position.

Given the size of the transaction relative to CHL’s market capitalisation, the change in future earnings, and the capital recycling strategy, investors should consider the potential impact on CHL’s valuation and future business trajectory.

Additional Information

• The full SPA will be available for inspection at CHL’s registered office for three months from the date of the announcement.
• CHL will make further announcements if there are any material developments regarding the transaction.

Disclaimer

This article is a summary and analysis of publicly announced information from Coliwoo Holdings Limited. It is not investment advice. Investors should conduct their own due diligence and consult with professional advisors before making any investment decisions. The information provided is subject to change and may be supplemented by subsequent company disclosures.

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