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STRICTLY CONFIDENTIAL
DRAFT
Project Phoenix
Land restructuring options
August 2010
DRAFT Recap of land restructuring
Proposed holding structure Comments Given the 40% foreign ownership restriction on owning property, land restructuring will have to be undertaken
Retirement Fund (RF)
60% 40%
SMYPC
Restriction
LandCo
Proposed restructuring plan
The initial proposed restructuring will involve the creation of a new holding company (“LandCo”) to which all the properties of the Packaging Business would be transferred LandCo will then be owned 60% by the RF and 40% by SMYPG
Properties Considerations on proposed restructuring
Initial considerations involved confirming whether the RF has sufficient funds to acquire the properties – confirmed RF does not have sufficient funds to acquire 60% stake in LandCo via the “normal way”, however funding problem can be solved using preferred share structure If funds were to be sufficient, substantial % of funds is invested in land
–
The preferred share structure and other considerations will be further explained in subsequent slides Other factors considered include tax liability, timing, funding and control
1
DRAFT Restructuring considerations
Advantages Disadvantages Incorporation of single LandCo adds the added complexity of determining relative holding(s) by RFs, as land from different BUs are pooled – each BU sells land to a single LandCo instead of multiple LandCos
Each structure has different implications in terms of Single LandCo
vs tax liability
timing
Multiple LandCos?
Single LandCo vs Multiple LandCos?
Incorporating single LandCo minimises tax – incorporation of each LandCo involves DST on par value of shares (0.05% of par value)
funding control
Straight sale1 vs tax deferred transfer (TDT)2?
Straight sale is quickest – no BIR ruling required as opposed to TDT, which lengthens restructuring process by...