Lippo Malls Indonesia Retail Trust to acquire Lippo Mall Kemang for $397 mil; proposes equity fund raising

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SINGAPORE (Sep 15): The manager of Lippo Malls Indonesia Retail Trust said wholly owned subsidiary KMT1 Holdings has entered into a sale and purchase agreement with sponsor-owned PT Almaron Perkasa for the acquisition of Lippo Mall Kemang.

Lippo Mall Kemang is a five-storey shopping centre with two basement floors and three mezzanine levels which is located in South Jakarta, Indonesia.

Based on the pro forma financial statements for fiscal year ended 31 December 2013, the Net Property Income contribution from Lippo Mall Kemang was $33.6 million, which represents a 23% increase in LMIR Trust’s Net Property Income for that fiscal year ended Dec 2013.

The total cost of the Lippo Mall Kemang acquisition is estimated to be $397 million. This comprises the purchase consideration of Rp 3,600 billion ($385.7 million), the acquisition fee of $3.7 million, which is payable in units of LMIR Trust to the manager, and professional and other fees and expenses of $7.6 million.

The purchase consideration is said to represent a discount of 2.7% to the higher of the two independent valuations of $396.4 million.

Under the sale and purchase agreement, PT Almaron Perkasa will receive Rp.3,180 billion ($340.7 million) of the Lippo Mall Kemang purchase consideration in cash with the remaining Rp.420.0 billion ($45.0 million) to be satisfied by way of the consideration units.

To fund part of the acqusition, Lippo Malls Indonesia Retail Trust's manager is proposing to issue up to 301.4 million new LMIR Trust units to PT Almaron Perkasa. These new shares represent 12.2% of the existing issued units.

Approval by unitholders for the acquisition and equity fund raising have to be sought at an extraordinary general meeting.