City Developments' stock price increased by 8.5%, closing the previous week at S$5.25 (US$4.08). This surge followed their announcement of offloading a prominent office building in Singapore with the aim of lowering debts and revitalizing investor trust subsequent to an internal family dispute.
Last Wednesday, the company announced that it had reached an agreement to sell its 50.1% share in the South Beach mixed-use integrated development project to another entity. IOI Properties Group, a Malaysian partnership firm , for S$834.2 million.
Situated in Singapore’s central business district and estimated at approximately S$2.75 billion (US$2.1 billion), this asset includes retail spaces, a 34-story office skyscraper, along with a 45-story structure home to a JW Marriott Hotel.
The transaction is anticipated to result in a disposal gain of approximately SGD 465 million for the fiscal year concluding December 31, 2025. This amount is slated to be used for decreasing bank debts and lowering overall indebtedness, according to CDL statements cited by the source. The Straits Times .
Before a highly publicized dispute erupted between billionaire Chairman Kwek Leng Beng and his son Sherman Kwek, who serves as the company’s CEO, CDL shares were trading at $5.12. This conflict caused the stock price to plummet to an unprecedented 16-year low of $4.76 in early March.
The repercussions started in late February when Leng Beng filed a lawsuit alleging that Sherman had circumvented the firm's nomination committee multiple times to alter the board structure and made significant modifications to various committees and governance policies.
The situation quickly became public knowledge when Sherman accused his father’s long-time advisor, Catherine Wu, of being involved. Meanwhile, Leng Beng criticized his son for a “series of significant errors” which he thought led to CDL’s stock performance trailing behind competitors. On March 13th, Leng Beng decided to withdraw the legal action.
In April, Sherman acknowledged that the event had eroded the trust of the shareholders, emphasizing that reducing the company’s increasing debt burden was essential.
This deal significantly bolsters CDL’s initiatives aimed at speeding up capital rotation, enabling them to lower their debt levels and reallocate resources more effectively. He stated regarding the South Beach transaction that they would keep working on extracting value from their varied investment mix and seek out new avenues for expansion.
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