Eng Wah sells 4 properties to founder, MD for $100m

August 26, 2008
Eng Wah sells 4 properties to founder, MD for $100m
Sale of assets will facilitate cinema operator's reverse takeover by
Transcu
By CONRAD TAN

ENG Wah Organization has agreed to sell four of its properties to its
founder and controlling shareholder Goh Eng Wah, and his daughter,
managing director Goh Min Yen, for $99.48 million.

The cinema operator and film distributor said yesterday that a search
by property consultants Jones Lang Lasalle for other buyers had been
unsuccessful, likely due to a depressed market environment.

The sale of the four properties to EW.G Pte Ltd, an investment
vehicle owned in equal parts by Mr Goh and Ms Goh, will facilitate
Eng Wah's reverse takeover by Singapore-based Japanese biomedical
firm Transcu first announced last year, Eng Wah said yesterday.

Disposing of the assets is a key condition for the reverse takeover
by Transcu. 'If the properties are not sold, the reverse takeover
will not take place,' said Eng Wah. And if the reverse takeover falls
through, EW.G will not buy the properties, it added.

The property sale is subject to the approval of Eng Wah's
shareholders at a meeting on Sept 10. Both Mr Goh - who has a deemed
interest in 70 per cent of Eng Wah's shares and is also executive
chairman of the company - and Ms Goh will abstain from voting on the
transaction. That means Eng Wah's minority shareholders will have the
final say on whether the sale takes place.

The four properties left in the portfolio that Eng Wah put up for
sale last November are the Jubilee Entertainment Complex in Ang Mo
Kio, Toa Payoh Entertainment Centre, Empress Theatre in Clementi and
the 16th floor of Orchard Towers. A fifth property, the Mandarin
Theatre at Kallang Bahru, was sold in June for $13 million to an
outside party.

The search for buyers has proved controversial. Last week, the
Securities Investors Association of Singapore (SIAS), which
represents retail investors here, called on Eng Wah to be more
transparent in the sale of its properties, asking it to 'ensure that
the sale price is maximised'.

SIAS president David Gerald said at the time: 'In our view, the
company must ensure that its assets are sold at a fair price and not
at a sub-optimal price to the controlling shareholder.'

Yesterday, Eng Wah was keen to stress that the proposed sale price of
the properties to EW.G was based on the value of the assets
determined by property consultants Chesterton International and CB
Richard Ellis.

Eng Wah said Jones Lang Lasalle's efforts to sell the properties
since it was appointed marketing agent last November had resulted in
several offers, but only one property - the Mandarin Theatre - was
sold. This was 'primarily due to what Jones Lang Lasalle believes to
be negative market sentiment and a depressed credit environment',
said Eng Wah.

In a separate announcement, the company said independent director Foo
Kok Swee has retired. Eng Wah has appointed Christopher Martin George
Brown, chief executive of private real estate fund Develica Asia-
Pacific and former executive chairman of Jones Lang LaSalle Asia-
Pacific, as a new independent director.

Eng Wah has recently disposed of other assets, including the former
Crazy Horse cabaret premises and assets, which it sold to club
operator St James for $2.75 million earlier this month, and a
condominium unit in Kuala Lumpur, which was bought by two of Mr Goh's
nephews for RM525,000 (S$220,271) last week.