BreadTalk Group - Divestment of investment in TripleOne Somerset for S$26.5m
- This morning, BreadTalk Group announced a divestment of investment in TripleOne Somerset for S$26.5m.
- In 2014, the group had subscribed for junior bonds, preference shares and ordinary shares for S$17.2m, which were issued by Perennial Somerset Investors Pte Ltd (PSIPL), who is the sole owner of the mall, TripleOne Somerset. Since then, the group had derived regular interest income on the junior bonds.
- The group is expected to record a gain of ~S$9.3m from the divestment before transaction costs.
- Recall that in Jan 2016, the group had divested its investment in another property 112 Katong, and gave out special dividends totaling S$3.8m, which represented ~45% of the divestment gain.
- In a similar vein, we think it is likely that shareholders can look forward to special dividends following the completion of the divestment in TripleOne Somerset.
- We have a HOLD rating and S$1.07 fair value estimate on the stock.