LHN Limited Announces Potential Major Asset Disposal: What Investors Need to Know About the Coliwoo PP Sale

Key Points of the Announcement

• LHN Limited has made a voluntary announcement regarding the proposed disposal of its entire 80% equity interest in Coliwoo PP Pte. Ltd., a key subsidiary.
• The sale involves 100,000 ordinary shares in Coliwoo PP, which equates to 100% of the company. LHN’s subsidiary, Coliwoo Holdings Pte. Ltd. (CHPL), owns 80%, while Globalpoint Far East Pte. Ltd. (GPFE) owns 20%.
• The proposed consideration for the sale is based on an agreed property value of S\$43,900,000, plus the adjusted net asset value of Coliwoo PP as of the closing date.
• Following the disposal, the purchaser will ensure Coliwoo PP enters into a master lease agreement with CHPL or its subsidiary for a leaseback of the property at 404 Pasir Panjang Road, Singapore 118741.
• The announcement is based on a non-binding term sheet, meaning there is no guarantee the deal will proceed as described.

Details Investors Should Not Miss

• Coliwoo PP is currently managed and operated as Coliwoo Hotel Pasir Panjang, a co-living space. The business is engaged in space optimisation and is a meaningful part of the Group’s property portfolio.
• If the disposal is completed, Coliwoo PP will cease to be a subsidiary of LHN Limited, potentially changing the Group’s asset composition and revenue streams.
• The disposal price is substantial and may impact LHN Limited’s balance sheet, cash flow, and future earnings, depending on the final terms and leaseback arrangement.
• The leaseback ensures continued operational involvement for LHN, but ownership of the asset will transfer to the purchaser.
• The purchaser and GPFE are independent third parties, and all information regarding them is based on data provided by them, not independently verified by LHN Limited.
• LHN Limited cautions shareholders that the term sheet is not a binding commitment, and there is no certainty that a definitive agreement will be signed or that the transaction will be completed.

Potential Share Price Sensitivity

This announcement is potentially price-sensitive for several reasons:

• The sale represents a major asset disposal, which could significantly alter LHN’s financial profile, asset base, and future earnings capacity.
• The property under consideration is valued at S\$43.9 million, a material figure relative to the Group’s overall scale.
• The leaseback arrangement suggests LHN will continue to operate the property, but without ownership, affecting future asset appreciation and security.
• There remains substantial uncertainty as the deal is not binding, and changes to terms or deal failure could impact market perception and share price volatility.

What Should Shareholders Do?

Shareholders are strongly advised to exercise caution when trading LHN shares. The outcome of this proposed transaction is uncertain, and any changes or developments could have a significant impact on the company’s valuation, strategic direction, and share price.

Investors should monitor further announcements for updates on the progress of the sale and leaseback, and consider seeking professional advice regarding their investment in LHN Limited.

Leadership and Governance

The announcement was signed by Lim Lung Tieng, Executive Chairman and Group Managing Director of LHN Limited. The Board includes two executive directors (Lim Lung Tieng and Lim Bee Choo) and three independent non-executive directors (Chan Ka Leung Gary, Ang Poh Seong, and Lim Kian Thong).

Conclusion

This potential transaction marks a significant strategic shift for LHN Limited, and its outcome could materially affect the company’s future prospects and share price. Investors should stay alert to subsequent disclosures and market reactions.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should consult their own professional advisers before making any investment decisions related to LHN Limited. The information is based on company announcements and has not been independently verified.

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