Company Briefs - 22 Jun 2007

Four developers pay $243m in joint buy

PROPERTY developers Koh Brothers, Heeton Holdings, KSH Holdings and Lian Beng Group have joined hands to buy the freehold Lincoln Lodge for $243 million, the companies said in a joint statement yesterday. The four will hold equal stakes in the project.

The price for the site, located in the prime District 11 off Newton Road, works out to $1449.3 per square foot per plot ratio (psf ppr) including an estimated development charge of $413,000.

The consortium is also 'quite confident' of acquiring a 3,358 sq ft plot of state land beside the property for about $3 million, said Koh Brothers chief executive Francis Koh.

If the four companies bag the state land, then the price paid for both sites will come to about $1,370 psf ppr, he said. Combined, the two sites will give the developers a total gross floor area of about 177,400 sq ft to work with.

The partners intend to build a 36-storey residential project with 120 luxurious apartments averaging 1,600 sq ft. The project will be launched in the first half of 2008, at prices in the region of $2,500 psf, Mr Koh said. The break-even cost for the project is expected to be around $2,000 psf.

The site was put on the market in May with a reserve price tag of $188 million. The consortium's offer of $243 million was the highest of a few bids, BT understands.

Mr Koh said that the partners were willing to pay significantly more than the reserve price as they were 'very interested' in the site, and the upbeat property market means that they can be confident of making a profit even at higher break-even costs. 'I think at the moment, it is about how much you can sell for,' Mr Koh said. He cited the site's 'excellent location' as well as the rising rental market as reasons.

The project will mark the first time all four companies have come together to develop a property. Koh Brothers and Heeton Holdings have worked together in the past - they will soon launch The Lumos in the prime Leonie Hill area, probably in the first week of July.

At the end of yesterday's trading, the companies' counters moved up as Koh Brothers' stock rose 1.5 cents to end at 55.5 cents, while Heeton's stock climbed 0.5 cents to close at 98.5 cents. Shares of KSH rose 4 cents to close 87 cents, while Lian Beng's stock ended the day 2.5 cents up at 44 cents.

FirstLink to buy China fertiliser firm for $64m

FIRST it bought into salt, then biodiesel. Now it is buying into fertiliser.

FirstLink Investments Corporation, an investment holding company which has operations in salt mining and distribution, as well as manufacturing electronic equipment, is buying an organic fertiliser company in China for $64 million.

FirstLink Investments yesterday said it will buy China Plant Nutrition Holdings in two phases; initially taking a 25 per cent share in the China company for $16 million, with the later option of buying the remaining 75 per cent for $48 million, all subject to regulatory approval.

China Plant Nutrition is engaged in research, and production and sale of green organic compound fertiliser, as well as developing environmental protection technology.

Organic fertiliser is the next big thing in China, said Ling Yew Kong, executive chairman of FirstLink. 'Agriculture has started to come up very well in China, and I am optimistic about the growth prospects of the fertiliser industry, particularly the compound fertiliser market,' he said.

He said the fertiliser business complements FirstLink's salt operations, since salt constitutes a big ingredient in fertiliser. 'Salt from the group's mines could be used in making the fertiliser,' he said.

The initial $16 million investment will be paid for by the issue of 74 million new shares at 14 cents per share, plus $5.6 million in cash.

This phase is expected to be completed by February. Post-acquisition, the enlarged share capital of FirstLink will be 480 million shares.

Chen Duo Wen, chairman of China Plant Nutrition, will take a board seat on FirstLink, while FirstLink will have two board representatives at China Plant Nutrition.

China Plant Nutrition has sales networks in the Gansu, Henan and Shaanxi provinces of China, and also plans to acquire three more fertiliser companies in China.

It expects to report net profit after tax of $8.8 million this year, up from $6.3 million last year.

FirstLink, which halted trading in its shares yesterday, began in 1973 as Singatronics Pte Ltd, a manufacturer of consumer electronic products such as pocket calculators, toys and games.

The company was then listed on Sesdaq, on Oct 19, 1987, upgrading to the Singapore Exchange main board in 1990.

The group purchased a 56.22 per cent stake in Green Salt Group Ltd, which makes and sells salt products in Asia.

Last year, FirstLink Capital, a wholly owned subsidiary of FirstLink Investments, invested $1 million in Van Der Horst Biodiesel, which is a joint venture to build a US$40 million biodiesel processing plant on Jurong Island.

Pan-United bags US$266m contracts

SHIPBUILDER Pan-United Marine (PUM) yesterday announced that it has won US$266.7 million worth of contracts to build four anchor-handling, towing and supply (AHTS) vessels.

The contracts for the 18,000 bhp 200-tonne bollard pull AHTS vessels from repeat customer Swire Pacific Offshore Operations almost doubles PUM's order book, to just under $1 billion. The Swire vessels will be built at PUM's 11-ha Singapore yard.

The latest contracts, which include the supply of major equipment by PUM, follow two contracts the company won last month to build Singapore's first two ultra-large AHTS vessels.

Those contracts, worth $98 million excluding owner-furnished equipment, were from another repeat client, Lewek Shipping, a subsidiary of mainboard-listed Ezra Holdings.

PUM executive chairman Henry Ng said: 'We are pleased that amidst the increasing competition and fervour in the buoyant oil and gas industry, we have the continued confidence of our regular clients to execute their various contracts.

'We are also reaping rewards from having positioned ourselves early in the large AHTS vessel sector. The latest orders are scheduled to be completed in 2010 and 2011, giving continuity to the group's newbuilding programme.'

To date, PUM has successfully completed 30 units of AHTS vessels ranging from 4,800 bhp to 12,240 bhp.

Of these, four AHTS vessels and two platform supply vessels (PSVs) were for Swire Pacific. Wholly-owned by Hong Kong's Swire Group of Companies, Swire Pacific is one of the largest operators of AHTS vessels and PSVs in this region with a young fleet of vessels.

Three weeks ago Dubai Drydocks World, a unit of Dubai World, made a cash takeover offer for PUM at $2.38 a share valuing the company at some $650 million.

PUM's shares, which have shot up more than 40 per cent over the last three months, closed a cent up at $2.38 yesterday.