Lippo Mall Puri For Sale IDR 3.5 Trillion, The Buyer Is A Subsidiary Of Lippo Karawaci

JAKARTA - The property company, PT Lippo Karawaci Tbk, through its subsidiary, PT Mandiri Cipta Gemilang (MCG), plans to sell one of its assets, namely Lippo Mall Puri. Lippo Karawaci will reap Rp3.5 trillion in funds from this transaction.

Citing the disclosure of information on the Indonesia Stock Exchange (IDX), Monday, August 31, MCG, which is engaged in real estate, will transfer ownership of the shopping center to PT Puri Bintang Terang (PBT).

For information, MCG is a subsidiary whose entire shares are indirectly owned by Lippo Karawaci, established based on and subject to Indonesian law, domiciled at PX Pavilion 3rd Floor, Jl. Puri Indah Boulevard Blok U1, Puri Indah, RT002 / RW002, Kembangan Selatan, Kembangan, West Jakarta, Indonesia.

Meanwhile, PBT is a subsidiary whose entire shares are indirectly owned by Lippo Malls Indonesia Retail Trust (LMIRT), established based on and subject to the laws of the Indonesian state, domiciled at Gedung Berita Satu Plaza 8th Floor, Jl. General Gatot Subroto, Kuningan Timur, Setiabudi, South Jakarta, Indonesia. LMIRT is a real estate investment fund established and subject to Singapore law.

"The transaction plan is part of the company's asset-light strategy and is aimed at increasing liquidity. The proceeds received from this transaction will be used to finance the company's operational activities," wrote the management of Lippo Karawaci.

The sale of property assets belonging to the issuer coded LPKR shares will be carried out through a REIT (Real Estate Investment Trust) company, namely Lippo Malls Indonesia Retail Trust (LMIRT). In detail, the sales transaction is in the form of a flat unit for Lippo Mall Puri.

"The total value of the transfer transaction is Rp3.5 trillion. This amount does not include value added tax (VAT). The sale and purchase price must be paid by PBT to the MCG," the company explained.

The related parties agreed to complete the transaction by March 31, 2021 or other date as agreed in writing by the parties. Meanwhile, this transaction was signed on March 11, 2019.

The plan to transfer the property of the Lippo Group was initially expected to be implemented no later than the end of December 2020 after the fulfillment of all preliminary requirements as required in the sale and purchase agreement.

The company has prepared a number of schemes to transfer ownership of Lippo Mall Puri. First, the company will provide funding to one of its subsidiaries, Bridgewater International Ltd, either in the form of capital or loans. The amount is 280 million Singapore dollars.

Second, the plan to provide loans to be provided by MCG to LMIRT's subsidiary, Binjaimall Holdings Pte. Ltd. All funds that will be received by Binjaimall Holdings will be channeled to PBT. PBT will use the funds to pay for property purchases to MCG.

This transaction is a transaction that is exempted from the provisions regarding Material Transactions based on Regulation No. IX.E.2, as regulated in provision 3.a.5 of Regulation No. IX.E.

Through this transaction, the divestment of assets to affiliated parties is one of the company's steps in carrying out recycling assets. This is done in order to generate new capital to support company expansion.