SHENZHEN, China, Aug. 5,
2020 /PRNewswire/ -- Nam Tai Property Inc. ("Nam Tai" or the "Company") (NYSE Symbol: NTP)
today responded to the letters published by IsZo Capital Management
LP (together with its affiliates, "IsZo") on May 27, 2020 and July 20,
2020, with the following statement:
The Company values constructive input from all of its
shareholders, and is committed to acting in the best interest of
all shareholders to enhance long-term value.
The Company has engaged with IsZo since learning of its filing
of a Schedule 13G disclosing its holdings in Nam Tai in February
2019, including through a project site visit in Shenzhen, a conference meeting via telephone,
and an in-person meeting in New
York, in May, June and December
2019, respectively. Despite the Company's attempts to
maintain a constructive dialogue, IsZo has chosen to seek control
of the Nam Tai Board and removal of a majority of the Directors
re-elected by the Company's shareholders two months ago in
June 2020. IsZo currently owns less
than 10% of the Company's outstanding shares.
The Company believes that IsZo's letters and actions demonstrate
a significant misunderstanding of the Company's strategic plan and
project value. Neither IsZo nor its nominees are equipped with the
in-depth knowledge and extensive experience required to
successfully operate large-scale industrial real estate and urban
renewal projects in China. To
date, IsZo has also not provided any credible plan to create
further value.
Nam Tai remains open to
maintaining a constructive dialogue with IsZo, as it does with all
shareholders, about Nam Tai's
strategy to create sustainable, long-term value.
The Board and Management Team are Executing a
Clear and Differentiated Strategy to Enhance Shareholder
Value
Nam Tai's Board and management
team are committed to driving value and shaping the Company into a
leading industrial ecosystem operator and a respected enterprise
with a clear development strategy, including:
- Unleash the values of existing projects.
-
- Promote corporate tenancy of Nam Tai Inno Park, Nam
Tai - Tang Xi Technology Park
as well as Nam Tai -
U-Creative Space (Lujiazui), and improve cash flow;
- Accelerate the construction of Nam Tai Technology Center and
consider application for pre-sale permit when related conditions
are met; and
- Promote the application for urban renewal of Nam Tai Inno
Valley.
- Improve product and service qualities.
-
- Deliver top-quality projects that will provide tenants with
high-quality industrial space;
- Further improve industrial operation systems and cultivate the
industrial operation team; and
- Improve the performance of business invitation through enhanced
industrial operations and strengthen our image as a technology park
operator.
- Prudently manage financing and control costs.
-
- Prioritize the financing support for the development and
construction of existing projects;
- Maintain asset-liability ratio and liquidity at a healthy
level; and
- Continuously evaluate and adjust the project budget to achieve
effective and efficient cost control.
- Explore development opportunities in the Guangdong-Hong Kong-Macao Greater Bay Area
(the "Greater Bay Area").
-
- Focus on the Greater Bay Area markets and continuously explore
differentiated projects and development models; and
- Maximize returns for the Company and our shareholders through
sustainable development strategies.
To successfully implement the above development strategies,
Nam Tai is taking steps to
supplement its portfolio of existing projects with complementary
high-quality land resources, strengthen its image in the Greater
Bay Area and mitigate risks through project diversification.
Proactively Invest in High-Quality Land
Resources
Nam Tai employs a strategic
development thesis to deepen its investment layout in the Greater
Bay Area. Most recently, in its first step into the Dongguan commercial and residential market,
the Company successfully won the bidding of a land parcel in
Machong Town, Dongguan.
Dongguan has been designated a
leading advanced manufacturing hub in the region by the Chinese
government while Machong is one of the fastest growing areas in
Dongguan with the presence of a
number of China's top 500
companies and strong local housing demand.
The Company has carried out a comprehensive and rigorous
assessment, conducted land surveys and surrounding market research
in the local area before the land investment in Machong. Although
the COVID-19 outbreak in Mainland China was ongoing when we
participated in the public auction, we believe that it was a
suitable investment opportunity, and the favorable property market
policies introduced by the local government at that time were
conducive to our bidding. After the successful bidding and
settlement of the land payment, as of the end of June 2020, our current ratio and asset-liability
ratio were maintained at a healthy level of 1.23 times and 57.5%,
respectively. This reflects that this forward-looking investment,
as we planned, did not compromise the Company's financial
conditions.
This strategic site will also help Nam
Tai:
- Expand to Dongguan, a key
growth potential city in the Greater Bay Area;
- Expand the Company's residential and commercial property
portfolio;
- Create powerful synergies with other existing projects in the
nearby Shenzhen;
- Form new relationship networks within the local communities;
and
- Enhance brand awareness in Dongguan and Guangzhou.
To successfully implement its differentiated growth strategies,
Nam Tai is led by a dedicated
management team with rich industry experience and deep
insights.
Actively Engaged, Professional Management
Team
Since the appointment of Mr. Ying Chi
Kwok as Chief Executive Officer in February 2018, Nam
Tai has attracted and deployed experienced managers in the
Chinese real estate industry, covering the areas of project
management, construction management, procurement and cost control,
financing, human resources, and more. This new management team
consisting of China real estate
experts has driven the transformation of the Company into a leading
industrial real estate developer and operator in the Greater Bay
Area. The new management team led by Mr. Kwok has made significant
progress driving value for shareholders in the past two and a half
years by:
- Significantly reducing project costs. The original
development budget of Nam Tai Inno Park was approximately
$312 million[1] as disclosed in 2017. After the
new management team arrived and reviewed the cost in 2018, a series
of new measures have been adopted. As of June 30, 2020, the estimated development budget
of Nam Tai Inno Park has been significantly reduced to
approximately $195 million[2]. This critical cost saving
has better positioned the Company to create substantial shareholder
value and propelled the development of the Company.
- Unleashing the values of industrial projects.
Nam Tai Inno Park was an open space
in 2017, and now it has been built into a high-quality large-scale
technology park in Guangming District, Shenzhen. Even though it is still in the
construction stage, as of June 30,
2020, the pre-leasing rate of Nam Tai Inno Park has reached
23%. The buildings on the site of Nam Tai Technology Center used to
be an old factory building. Now Nam
Tai is carrying out pile foundation construction and plans
to build it into another integrated technology park.
- Creating value through urban renewal. Prior to the urban
renewal, Nam Tai Technology Center was originally located on
traditional industrial land, where buildings and units cannot be
divided and sold individually. Leveraging their experience in urban
renewal, the new management team successfully converted the land
into innovative industrial land, enabling buildings and units on
the land be divided and sold individually if relevant conditions
are met, greatly enhancing the value of the project. In addition,
Nam Tai is applying for the urban
renewal of Nam Tai Inno Valley to replicate this successful
model.
- Prioritizing financing support for the development and
construction of existing projects. Prior to the arrival of the
new management team, the construction financing of Nam Tai Inno
Park and Nam Tai Technology Center had not been secured. As of
December 31, 2019, the Company has
successfully obtained credit lines totaling approximately
$299 million[3] primarily for the construction of
both projects, despite various difficulties due to the fact that
industrial land is generally less preferred by banks and other
creditors.
The Board and the management are united to drive the development
of the Company and provide strategic guidance for the Company's
development for the best interests of all shareholders.
Reputable and Well-Functioning Board of
Directors
Nam Tai is strongly committed to
integrity and good corporate governance, and the Company's Board of
Directors is engaged in overseeing the Company's strategic
direction and operational execution for the interests of all
shareholders. The members of the Board are experts in their
respective fields with excellent reputations.
The Board is composed of members from North America and China, providing both strategic advice for the
Chinese market and an international perspective, and possesses vast
amounts of experience in the real estate industry. The Company
values and benefits from the independence of its directors, with
six of the seven members being independent and all three committees
of the Board, including the Audit Committee, the Nominating and
Corporate Governance Committee, and the Compensation Committee,
comprised entirely of independent directors. In 2019, the Board
members had 100% attendance at all Board and committee meetings.
The current directors were recently re-elected by our shareholders
at the Annual General Meeting of Shareholders in June 2020, a reflection of our shareholders'
trust and support for the current Board.
Further details on our Board members – Mr. Ying Chi Kwok, Mr. Peter
R. Kellogg, Dr. William Lo,
Mr. Mark Waslen, Mr. Vincent Fok, Prof. Si Zong Wu and Dr. Aiping
Lyu, – including their experience, expertise and background,
as well as the Company's corporate governance provisions, are
available on the Investor Relations page of the Company's website
at: https://www.namtai.com/director/index.html.
Strategic Relationship with Kaisa
Group
Kaisa Group ("Kaisa") is a large-scale comprehensive investment
group in China, with competitive
advantages in real estate development and urban renewal, among
others. In 2019, Kaisa's attributable contracted sales amounted to
RMB 88.1 billion, or approximately
$12.6 billion[4], ranking 27th in China[5]. In the field of urban renewal,
Kaisa is constantly regarded as one of the national leaders. As of
December 31, 2019, Kaisa had 147
urban renewal projects covering a site area of nearly 40 million
square meters, the majority of which in Guangzhou and Shenzhen[6].
Kaisa is not only the largest shareholder of Nam Tai, but also a strategic investor that
supports the long-term development of Nam
Tai. The strategic relationship with Kaisa is a key asset to
the Company. Nam Tai and Kaisa
engage in regular business-level cooperation, such as property
management agreements, which are beneficial to the Company's
transformation from electronic production to real estate operation.
The reputational and branding effect of having Kaisa as the
Company's largest shareholder is also believed to be a critical
contributor to Nam Tai's significant
advantages on cost control, business operations, talent
recruitment, and government and external affairs in China.
In addition, Nam Tai clearly
understands that our business must operate in the best interests of
all shareholders, which is the guiding principle that the Board and
the management always follow.
Nam Tai is
Taking Actions to Drive Shareholder Value
The Board and the management, through their extensive experience
in the Chinese market and real estate industry, are implementing
differentiated strategies to promote business growth and create
value for shareholders. The actions taken by IsZo risk derailing
the progress the Company is making on executing its strategic
objectives and delivering enhanced value to shareholders.
Shareholders may need to consider whether it is necessary to
convene a special meeting of shareholders to re-elect the board of
directors at this critical moment; whether this action will have a
negative impact on the execution of our strategy; whether your
investment in the Company will be harmed as a result.
The COVID-19 pandemic is still spreading around the world,
including in China, and we have no
way of knowing when the pandemic will end. However, we have done
our utmost to ensure the health and safety of our tenants and
employees and resume our operations. During the pandemic, we shall
remain committed to our posts and continue to promote tenancy and
construction.
Nam Tai urges all shareholders to
refrain from taking any action, including executing a written
request for a special meeting at this time.
[1] Exchange rate of USD 1
to RMB 6.96
|
[2] Exchange rate of USD 1
to RMB 7.14
|
[3] Exchange rate of USD 1
to RMB 6.98
|
[4] Exchange rate of USD 1
to RMB 6.98
|
[5] According to the "2019
China Real Estate Enterprise Sales Ranking" released by CRIC in
December 2019
|
[6] Figures from the
"Annual Results Presentation 2019" on the corporate website of
Kaisa
|
Forward-looking Statement and Factors that Could Cause our
Share Price to Decline
Certain statements included in this press release, other than
statements of historical fact, are forward-looking statements.
Forward-looking statements generally can be identified by the use
of forward-looking terminology such as "may", "might", "can",
"could", "will", "would", "anticipate", "believe", "continue",
"estimate", "expect", "forecast", "intend", "plan", "seek", or
"timetable". These forward-looking statements, which are subject to
risks, uncertainties, and assumptions, may include projections of
our future financial performance based on our growth strategies and
anticipated trends in our business and the industry in which we
operate. These statements are only predictions based on our current
expectations about future events. There are several factors, many
beyond our control, which could cause results to differ materially
from our expectation. These risk factors are described in our
Annual Report on Form 20-F and in our Current Reports filed on Form
6-K from time to time and are incorporated herein by reference. Any
of these factors could, by itself, or together with one or more
other factors, adversely affect our business, results of operations
or financial condition. There may also be other factors currently
unknown to us, or have not been described by us, that could cause
our results to differ from our expectations. Although we believe
the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity,
performance, or achievements. You should not rely upon
forward-looking statements as predictions of future events. These
forward-looking statements apply only as of the date of this
announcement; as such, they should not be unduly relied upon as
circumstances change. Except as required by law, we are not
obligated, and we undertake no obligation, to release publicly any
revisions to these forward-looking statements that might reflect
events or circumstance occurring after the date of this press
release or those that might reflect the occurrence of unanticipated
events.
ABOUT NAM TAI PROPERTY INC.
We are a real estate developer and operator, mainly conducting
business in Mainland China. Our main land resources are located in
the Guangdong-Hong Kong-Macao
Greater Bay Area ("Greater Bay Area") and Wuxi, China, of which the three plots in
Shenzhen will be developed into
Nam Tai Inno Park, Nam Tai Technology Center and Nam Tai Inno Valley. We plan to build these
technology parks into landmark parks in the region and provide
high-quality industrial offices, industrial service spaces and
supporting dormitories to the tenants. Based on the experience of
developing and operating technology parks and an industrial
relationship network accumulated over the past 40 years, we have
also exported the operation model of technology parks to other
industrial properties. Through an asset-light model, we have leased
industrial properties for repositioning and business invitation. We
will also expand the commercial and residential property business
in China as an auxiliary
development strategy of the Company. As the growth prospects of
China maintain, we shall seize
development opportunities in the Greater Bay Area and other first-
and second-tier cities in China,
and continue to strengthen and expand the business of industrial
real estate, and commercial and residential properties. Nam Tai
Property Inc. is a corporation registered in the British Virgin Islands and listed on the New
York Stock Exchange (Symbol: "NTP"). Please refer to our corporate
website (www.namtai.com) or the SEC
website (www.sec.gov) for our press releases and financial
statements.
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SOURCE Nam Tai Property Inc.