SINGAPORE Nov 21 CapitaLand Ltd, Southeast Asia's largest property developer, priced a third of its majority stake in Australand Property Group at the low end of an indicated range, valuing the stake's sale at A$426 million ($400 million).
At the start of the year, Singapore's CapitaLand said it would review its Australia presence, and that it regarded Australand as more a financial investment and as a company with a business model different from its own. It later concluded its stake was a "key investment."
CapitaLand is reducing its stake in Australand to 39.1 percent from 59.1 percent by selling 115.66 million stapled securities at A$3.685 each, the company said in a statement on Thursday after flagging the sale a day earlier.
The top end of the indicative range was A$3.75. The stock was down 4 percent at A$3.95 at 0145 GMT.
The sale will improve the stock's liquidity and in turn improve its index ranking, which together will boost interest in Australand from institutional investors, CapitaLand said.
It said it will use the proceeds for "new opportunities."
"We are confident of the prospects of Australand as well as the real estate sector in Australia," said Lim Ming Yan, CapitaLand's president and group chief executive officer. "We are comfortable with our remaining interest in Australand and it will remain a key investment for us."
The placement will result in a loss of about S$127.5 million ($102.5 million) taking into account divestment gain, fair value gain and a one-time accounting loss arising from the recognition of foreign currency translation losses and hedging reserves, CapitaLand said.
CapitaLand shares were a shade higher in a weak broader Singapore market, having fallen 17 percent so far this year.
Citigroup is the sole bookrunner for the placing which is likely to end on Nov. 26, CapitaLand said.
($1 = 1.2437 Singapore dollars) ($1 = 1.0641 Australian dollars) (Reporting by Anshuman Daga; Editing by Christopher Cushing)