OKH Global puts 5 Pioneer Sector Lane factory on auction

PROPERTY developer OKH Global is launching a public auction to sell its property located at No 5 Pioneer Sector Lane.

The public auction will be held at 10am on Tuesday, June 4 at the above address.

The property is a four-storey single-user ramp-up factory for own use, with a gross floor area of 137,542 square feet.

It has a 10-year lease term from Aug 16, 2008, and a further term of 19 years 11 months 16 days from Aug 16, 2018, subject to conditions contained in the lease documents with JTC.

The sale of the property is subjected to JTC Corporation and shareholders' approval.

OKH has recognised a significant impairment of S$16.4 million on the property over the last few years and may need to recognise a further loss if the property is auctioned off at a price lower than the current book value, it said.

Due to the significant losses recognised on the property, the Singapore Exchange (SGX) has required that the sale be approved by shareholders.

SGX is allowing the company to seek shareholders' ratification of the proposed sale at an extraordinary general meeting (EGM) to be convened within three months. Shareholders will also be given an independent valuation report of the property in the EGM circular.

OKH Global said it needs to expedite the sale as "any delay will incur additional months of amortisation cost and expenses which will further reduce the value of the property". 

Ratification is needed because "prospective buyers are likely to want an expeditious completion of sale and would not accept the uncertainty of prolonged approval process", the group added.