Cedar Strategic to acquire 49% stake in Golden City Yangon property for USD 35 mil

SINGAPORE (Oct 17): Cedar Strategic is acquiring a 49% effective stake in mixed use luxury development Golden City in Yangon for US$24.9 million ($34.6 million).
Cedar says the acquisition of the 335,284 sqm Golden City project is in line with its growth strategy of developing and investing in properties within emerging markets. The project is supported by a “stable political landscape” and could potentially generate “good development returns and yields”, says the group in its filing.
The group will acquire a 100% stake in DAS who owns a 70% stake in Uni Global Power which in turn owns a 70% stake in the developer of the project.
The purchase will be satisfied through $10 million in cash and the issue of 5.2 billion shares, representing 25% of its enlarged share issue after acquisition, at 0.4 cent each. The cash portion will be funded both through internal means and a US$5 million loan from controlling shareholder, Luo Shandong.
The transaction is expected to take place in two phases. The first involves the acquisition of the 70% stake in DAS from four vendors namely, Strong Ever, Asiabiz Services, Sunshine Shimmer and Consortium Investments.
The second phase involves the acquisition of the remaining 30% stake in DAS from D3 Capital, which is 100% owned by the immediate family members of Teo Cheng Kwee, the non-executive director of Cedar. As such, this portion of the acquisition constitutes an interested party transaction.
Furthermore, as the consideration in the second phase exceeds 5% of the group’s net tangible assets of RMB65.56 million at end Dec, the acquisition is subject to the approval of shareholders.
As at end March, DAS had a net tangible liability of $6.7 million and the group is expected to record a loss before income tax, non-controlling interests and extraordinary items of $3.2 million after the transaction is completed.
Source: The Edge Singapore

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