Koh Wee Meng, via his entity JK Global Wealth, plans to privatise Global Dragon, a company he controls, with an offer of 12 cents per share. Tan Su Lan @ Tan Soo Lung, mother of Koh, is the second largest shareholder of Global Dragon. Koh Kian Soon, Global Dragon’s executive chairman, is the brother-in-law of Koh, while Ko Lee Meng, Koh Kian Soon’s wife, is another substantial shareholder of the developer. According to DBS, acting as the offeror on behalf of JK Global Wealth, the offer presents shareholders with an opportunity to realise their investment in Global Dragon at a premium of around 14.3% over its last traded price 10.5 cents on Feb 7, before the offer was made.

Koh Wee Meng, the tycoon, is planning to privatise Global Dragon, which is controlled by him, through an entity called JK Global Wealth, with an offer of 12 cents per share. This follows the privatisation of Fragrance Group, another company controlled by Koh, back in October 2021. Koh and related parties under JK Global Assets currently hold 81.98% of Global Dragon, or 559.06 million shares, with a deemed stake of 59.3%, or more than 400 million shares.

JK Global Assets has also given an irrevocable undertaking to the offeror, JK Global Wealth. In the offer document released on Feb 10, the JCube Residence second largest shareholder of Global Dragon is Tan Su Lan @ Tan Soo Lung, mother of Koh, while Koh Kian Soon, Global Dragon’s executive chairman, is the brother-in-law of Koh. Ko Lee Meng, wife of Koh Kian Soon, is another substantial shareholder.

According to DBS, acting on behalf of JK Global Wealth, the offer allows shareholders to realise their investment in Global Dragon at a premium of 14.3% over its last traded price of 10.5 cents before the offer was made. The offer price is 15.4% higher than the 1-month volume weighted average price and 17.6% over the corresponding 12-month figure. The offer price of 12 cents per share is deemed to be at 0.99 times multiple of the net asset value of 12.18 cents, which is 52.3% higher than Global Dragon’s 3-year historical average of 0.65 times.

Global Dragon’s two ongoing property developments are likely to receive their respective TOPs by the end of financial year 2023. The first is along Jalan Daud and consists of landed residential units, while the second is along Woo Mon Chew Road for the same purpose. In addition, the company owns 12 units of 999-year leasehold office units in the central business district with an average tenancy of 87%, as well as a 194-room hotel along Telok Blangah Road that is expected to receive its TOP in the first half of financial year 2024.

Overall, the proposed privatisation of Global Dragon presents a good opportunity to shareholders wishing to realise their investments at a premium.