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LMIR Trust Considers Exercising Put Option For Lippo Mall Kemang

Lippo Malls Indonesia Retail Trust is considering exercising the put option for Lippo Mall Kemang, a shopping centre located in South Jakarta, following delays in issuance of the strata-title certificates.

Lippo Mall Kemang was acquired by the group in September 2014 as a strategic acquisition of a prominent retail mall within an integrated development with sustainable retail traffic, as well as an opportunity to increase the size and enhance earnings of the group.

As the acquisition occurred before the strata title certificates relating to Lippo Mall Kemang were issued, the vendor of the mall, PT Almaron Perkasa, entered into a put option agreement.

Under the agreement, if the certificates are not issued in the name of PT Kemang Mall Terpadu (IndoCo), an indirect wholly-owned subsidiary of the group, the trustee will have the put option to require PT Wisma Jatim (a wholly-owned subsidiary of PT Lippo Karawaci Tbk, who is the sponsor of the group) or any/or other appointed entities to purchase the entire equity of IndoCo at a purchase price higher of IDR3.6 billion and the market value of the strata title units of Lippo Mall Lemang as determined by two independent valuers.

The group views the delay in the issuance of the Strata Title Certificates as a technical defect and stated that in the meantime, LMIRT continues to control, own and operate Lippo Mall Kemang, which continues to function and generate income for the group. The put option is due for exercise by 14 December 2015.

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