Singapore Corporate News - 17 Jul 2007

Oei, Equation invest further $16m in Centillion

TYCOON Oei Hong Leong and Sesdaq-listed Equation Corp are sinking a further $16.1 million into e-waste recycler, Centillion Environment & Recycling.

They will do so by exercising an option given to them when they first invested in Centillion, then known as Citiraya Industries, last year.

Mr Oei and Equation had been the white knights that had rescued the beleaguered Citiraya Industries, after it all but collapsed under a mountain of debt in 2005.

Both Mr Oei and Equation, then known as Heshe Holdings, had agreed to pump in $8.05 million each, in return for about 950 million shares in Centillion. It resulted in fresh cash for Centillion - and the white knights each owning 37.5 per cent of the company.

The investment agreement also gave Mr Oei - through his private vehicle, the Oei Hong Leong Foundation - and Equation the option of investing a further $8.05 million each into Centillion, in return for about 950 million new shares in the company.

Centillion announced yesterday that both parties had given it notice that they would be exercising their option to fully take up the new shares in the company.

The option is expected to be exercised on Friday.

This would result in Mr Oei and Equation each owning 42.86 per cent of Citiraya's new enlarged share capital.

The exercise of the option will also mean that Mr Oei and Equation would be sitting on some hefty paper gains.

The option would allow the investors to buy the new Centillion shares at about $0.0085 a share. Centillion shares closed at $0.20 yesterday, down a cent from the previous close. Assuming that their options were exercised yesterday, it would mean that the total stakes held by Mr Oei and Equation are sitting on paper profits of some $364 million each.

Both parties have, however, earlier affirmed their long-term commitment to Centillion - suggesting they won't be selling their stakes in the company any time soon.

Mr Oei had declared last year that he would invest all that would be needed to keep Centillion afloat, as he believes in the long-term business potential of e-waste recycling.

Equation, likewise, has indicated its commitment to Centillion. Equation - since its revamp in December 2003, when Eddie Chng took over the company - has made environmental businesses its core competency. It already owns 60 per cent of CH E-Recycling Pte Ltd - a company engaged in the recycling and trading of metals such as copper, aluminium and gold - and recently announced a deal to buy into privately held Solar Morph, through which it will build Singapore's first thin-film solar panel manufacturing plant.

Equation also announced last month that it had granted Mcpeekay Consulting Group an option to buy up to 150 million shares in Centillion at nine cents apiece, for a total of $13.5 million.

Advanced wins contracts worth $8.7m

ADVANCED Holdings, a local player in the rapidly expanding petrochemical and ethylene market, announced yesterday that it has secured three key contracts with a combined worth of $8.7 million.

The contracts will see Advanced team up with two major oil companies in China, Sinopec and Petrochina, as well as local chemical manufacturer Lucite International. Advanced will be engaged in the provision of process equipment and engineering services to various petrochemical plants and refineries.

Advanced is looking at tapping into the rapidly expanding chemical industry in China, which is forecast to grow at an annual average rate of 10.4 per cent till 2016.

'These new contract wins reflect our robust growth strategy in China. These wins are also a testimony of our strong market reputation and track record as we have gained the trust of top players in China,' said Wong Kar King, managing director of Advanced.

The new contracts follow $26.7 million worth of contracts Advanced secured in April this year.

'With our strong track record and customer base in China, the group is therefore well positioned to ride the crest of the expansionary waves that are sweeping China's economy and to benefit from this robust trend,' Dr Wong said.

Advanced, which is listed on the Singapore Exchange, has established itself as a specialist company supplying equipment and technologies to the chemical, petrochemical, oil and gas, power generation and micro-electronics industries all over the world.

The Chinese companies Sinopec and Petrochina are among the region's largest oil refiners.

Advanced also announced that the new contracts are expected to have a material impact on the company's earnings in the current financial year. Advanced's market cap stood at $161.79 million at closing yesterday, with shares closing higher at $0.625.

Labroy Marine gets US$47.2m of orders

LABROY Marine has announced new contracts worth US$47.2 million.

The two shipbuilding contracts, each worth US$23.6 million, were awarded by a German customer for two platform supply vessels. The ships are scheduled to be delivered in 2009.

With the latest orders, Labroy said its total outstanding order book stands at S$2.30 billion.

Labroy has been riding the current bullishness in the offshore and marine sector. Improved margins at its shipbuilding and offshore engineering division had earlier led to an 81 per cent surge in first-quarter net profits at the company.

The company reported net earnings of $34.25 million for the three months ended March31, 2007, compared with the $18.87 million in the previous corresponding period. Revenue rose 60 per cent rise to $188.31 million.

The increase in net earnings in the first quarter was largely due to increased contribution from the shipbuilding and offshore engineering division, improved margin in the same division and the ship repair division, as well as higher gains from the disposal of vessels, it said.