AF Global Sells Knight Frank Stake: Major Transaction Unlocks Cash, Signals Strategic Refocus

In a move set to reshape its portfolio and potentially influence its share price, AF Global Limited has announced the completion of its proposed divestment of its entire 55% stake in Knight Frank Pte Ltd (KFSG) for S\$36.89 million. This major transaction, which received a regulatory waiver to bypass a shareholder vote, marks a strategic exit from a non-core asset and a pivot towards the Group’s hospitality business.

Key Points for Investors

• AF Global Limited has sold its entire 55% stake (550,000 shares) in Knight Frank Pte Ltd to Knight Frank Asia Pacific Pte Ltd for S\$36,888,888.
• The disposal has been classified as a “major transaction” under SGX rules but was allowed to proceed without the need for a shareholder vote due to a waiver granted by the Singapore Exchange (SGX-ST).
• The transaction is expected to be completed on 17 October 2025, bringing an estimated gain of S\$3.44 million to AF Global.
• Proceeds will be used for general corporate purposes, with any dividend or distribution on hold pending the outcome of a separate privatisation scheme.
• Majority shareholders, holding over 72.6% of the company’s shares, gave irrevocable undertakings to support the sale.

Details of the Transaction

AF Global Limited, through its wholly-owned subsidiary Cheong Hock Chye & Co. (Pte.) Ltd., has agreed to sell its entire stake in Knight Frank Pte Ltd (“KFSG”), a leading Singapore real estate consultancy, to Knight Frank Asia Pacific Pte Ltd (a subsidiary of Knight Frank LLP, UK-headquartered global real estate group). The sale comprises 550,000 ordinary shares, representing 55% of KFSG’s issued shares.

The purchase consideration of S\$36,888,888 was arrived at after arm’s length negotiations and will be satisfied as follows:

• S\$150,000 paid as exclusivity fee (already received)
• S\$3,538,888.80 paid as deposit upon signing the Sale and Purchase Agreement (SPA) on 7 October 2025 (already received)
• The remaining S\$33,199,999.20 to be paid on completion of the sale

The SPA is not subject to any adjustment mechanism for the consideration, which creates urgency for the seller to complete the transaction swiftly.

Why Is This Deal Price Sensitive?

• Immediate Cash Injection and Balance Sheet Strengthening: The transaction will deliver a net gain of approximately S\$3.44 million, improving the company’s net tangible assets (NTA) and net asset value (NAV) per share (from 14.43 cents to 14.76 cents, based on FY2024 financials).
• Earnings Impact: The deal improves pro forma earnings per share, reducing the reported loss from (0.25) cents to (0.01) cents per share for FY2024.
• Strategic Refocus: The disposal removes a non-core, legacy asset from AF Global’s portfolio, allowing management to focus on the Group’s primary hospitality operations in Thailand, Vietnam, and Laos.
• Privatisation Overhang: The use of proceeds is currently restricted due to an ongoing privatisation scheme by AFG Investment Pte. Ltd. No dividends or distributions will be made until the scheme’s outcome is determined.
• Regulatory Waiver Avoids Shareholder Vote: The deal moved ahead without an extraordinary general meeting, thanks to an SGX waiver. This was based on prior investor disclosures, the non-core nature of the asset, and irrevocable undertakings from majority shareholders.
• Reduced Risk Profile: The Board confirmed that the disposal will not cause any material change in the Group’s risk profile or geographic concentration.

What Investors Should Watch

• Completion Date: The deal is set for completion on 17 October 2025. Expect proceeds to be recognised in the next financial reporting period.
• Use of Proceeds: While the cash will boost working capital, any plans for dividends or acquisitions remain on hold pending the outcome of the privatisation.
• Strategic Clarity: The disposal highlights AF Global’s intention to streamline its operations and focus on hospitality assets, potentially leading to further portfolio adjustments.
• Privatisation Scheme: The outcome of the proposed scheme of arrangement with AFG Investment Pte. Ltd. remains a key share price catalyst. If the scheme fails, the company may reconsider the use of the Knight Frank disposal proceeds.

Other Material Terms

• Non-Compete and Non-Solicitation: AF Global has agreed not to compete with or solicit customers, suppliers, or employees from KFSG for two years post-completion.
• Cessation of “Knight Frank” Name: AF Global must immediately cease use of the Knight Frank brand or any similar marks after completion.
• Termination Clauses: If the deal is not completed by 31 March 2026 (or as mutually agreed), the SPA can be terminated and deposits returned to the buyer.

Financial Metrics and Impact

• Book Value of Sale Shares: S\$33,326,000 (as at 30 June 2025)
• Relative Figures: Sale shares represent 16.01% of group NAV, 21.17% of group net profit, and 36.40% of market capitalisation (as of 6 October 2025).
• Net Profit Contribution: The sold stake delivered S\$1,024,000 in net profit (1H2025).

Conclusion: A Potential Share Price Catalyst

This disposal is a potentially significant value-unlocking event for AF Global, as it converts a non-core holding into cash, strengthens the balance sheet, and supports the company’s strategic repositioning. The regulatory waiver, majority shareholder support, and the potential for future corporate actions (including privatisation and redeployment of sale proceeds) all point to this being a material, price-sensitive development. Investors should closely monitor both the completion of this transaction and updates regarding the privatisation scheme, as these could impact AF Global’s share price in the near to medium term.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult a professional adviser before making any investment decisions. The writer and publisher accept no liability for any losses incurred based on the information provided herein.

View AF Global Historical chart here