Polaris Ltd. Announces Disclosable Transaction: Sale of Office Property at Ubi Avenue

Summary of Transaction

Polaris Ltd. has announced the proposed sale of its investment property located at 81 Ubi Avenue 4 #03-12 UB. One Singapore 408830. The company has granted an Option to Purchase to Nan Kai Textiles (Private) Limited for a total cash consideration of S\$950,000. This transaction, classified as a “Disclosable Transaction” under Chapter 10 of the Catalist Rules, is noteworthy for investors as it could impact the company’s asset base, financial flexibility, and working capital position.

Key Details of the Proposed Sale

• Location and Description: The property is an office unit with a 60-year leasehold tenure (commencing on 31 December 2008) and a gross floor area of approximately 1,302 square feet. It is currently used as a corporate office and is not income-generating.
• Acquisition History: Polaris Ltd. acquired the property in 2013 to support business expansion.
• Buyer Details: Nan Kai Textiles (Private) Limited is an exempt private company in Singapore, mainly engaged in wholesale trading of textiles and leather. The company and its associates have no prior relationship or interest in Polaris Ltd.

Valuation and Financial Gains

• Book Value: As of 30 June 2025, the property’s book value stood at S\$431,448.
• Market Value: An independent valuation by Newmark Real Estate Singapore Pte. Ltd. assessed the market value at S\$900,000 as of 20 February 2026.
• Gain on Disposal: The company expects a gain of approximately S\$488,552 from the sale, after deducting estimated expenses of S\$30,000.
• Comparable Transactions: Recent similar properties in the area transacted between S\$529 and S\$986 per square foot from January 2025 to January 2026.

Terms and Payment Structure

• Option Money: S\$9,500 (1% of the consideration) paid upon signing the offer to purchase.
• Further Deposit: S\$38,000 (4% of the consideration) payable upon exercise of the option.
• Completion Payment: The remaining S\$902,500 (95% of the consideration) is payable on completion.
• Completion Date: Completion is scheduled within 8 weeks of the option exercise.
• Vacant Possession: The property will be delivered with vacant possession, sold “as is, where is”, and free from encumbrances except for existing restrictive covenants.

Use of Proceeds

• Estimated Net Proceeds: S\$920,000 after expenses.
• Mortgage Repayment: S\$240,062 (26.1%) will be used to repay the mortgage loan on the property.
• Working Capital: S\$679,938 (73.9%) will be allocated to general working capital, with S\$442,520 (48.1%) for the Group’s pre-loved goods business and S\$237,418 (25.8%) for the corporate segment.

Rationale and Strategic Impact

The Board believes the sale is in the best interests of the Company, as it allows Polaris Ltd. to unlock the value of the asset and bolster its working capital, improving financial flexibility. This aligns with the company’s strategy to focus on core business activities and streamline its asset base, potentially enhancing capital efficiency and supporting ongoing operational and strategic priorities.

Financial Effects on Key Metrics

• Net Tangible Assets (“NTA”) per Share:
  • Before Sale: S\$0.025
  • After Sale: S\$0.029
• Earnings/(Loss) per Share:
  • Before Sale: (S\$0.011)
  • After Sale: (S\$0.008)
• No new shares will be issued as part of the transaction.

Relative Figures Under Catalist Rules

• Net Asset Value of Disposed Asset vs Group: 10.5%
• Consideration vs Market Capitalisation: 5.6%
• Since both figures are above 5% but below 50%, this is a “Disclosable Transaction” and does not require shareholder approval at an extraordinary general meeting.

Other Key Points

• No profit guarantee or profit forecast has been provided in relation to the sale.
• No related party involvement: No Director, substantial shareholder, or associates have any interest in the transaction, apart from their shareholding interests.
• No new Director appointments or service contracts as a result of this transaction.
• Inspection of Documents: The Option to Purchase and Valuation Report are available for inspection at the registered office for three months.

Cautionary Statement for Shareholders

Shareholders and potential investors are advised to exercise caution when trading or dealing in the shares of Polaris Ltd. as there is no certainty that the sale will proceed to completion. It is recommended to consult professional advisers if there is any doubt about the actions to take.

Potential Price Sensitivity and Shareholder Implications

• The transaction will increase NTA per share and may reduce losses per share, improving the company’s financial profile.
• The sale and subsequent reallocation of funds could be seen as a move to strengthen the company’s liquidity and focus on core operations, potentially viewed positively by the market.
• The substantial gain on disposal (S\$488,552) and the use of proceeds to repay mortgage and support working capital could impact investor sentiment and share valuation.
• The lack of requirement for shareholder approval streamlines the transaction, ensuring no delays from voting procedures.
• The company has explicitly cautioned that completion is not guaranteed, which is a risk factor for investors to consider.

Disclaimer

This article is for informational purposes only and does not constitute investment advice, recommendation, or an offer to buy or sell securities. While efforts have been made to ensure the accuracy of the information presented, investors are urged to consult professional advisors and conduct their own due diligence. Polaris Ltd. has cautioned that the Proposed Sale may not proceed to completion and shareholders should monitor further announcements for updates.

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