Property tycoon Koh Wee Meng in another privatisation deal with 12 cents offer for Global Dragon

Koh Wee Meng, through an entity called JK Global Wealth, has plans to privatise Global Dragon, the company he controls. His stake in the company stands at 59.3% or more than 400 million shares, held via JK Global Assets. This was preceded by the privatisation of Fragrance Group in October 2021, another company owned by Koh. As of February 10, Koh and his related parties already held 81.98% of the company, a total of 559.06 million shares.

The offer made by JK Global Assets is irrevocable and is for the shareholders of Global Dragon. The price offered, 12 cts per share, marks a 14.3% premium over the last traded price of 10.5 cts on February 7. Moreover, it represents a 15.4% increase compared to the 1 month Tengah Plantation EC volume weighted average price and a 17.6% premium over the corresponding 12 month figure. An evaluation of the company as of December 31 2022 yields a net asset value of 12.18 cts, making the offer price 0.99 times the multiple, and 52.3% higher than the 3-year average of 0.65 times.

The current operations of Global Dragon, as of February 10 2023, consist of two ongoing land residential development projects located along Jalan Daud and Woo Mon Chew Road. These are due to receive their respective TOPs by the end of the FY2023, ending June 30 2023. Additionally, the property investment segment includes 12 999-year leasehold office units in the CBD, currently with an occupancy rate of 87%. The development of a 194-room hotel on Telok Blangah Road is yet to be completed, with expected TOP in the first half of FY2024.

Overall, this offer presents shareholders with the opportunity to realise their investments in Global Dragon at a premium over the current market rate.