Singapore Corporate News - 10 Aug 2007

Vita to take stake in 5-star hotel

VITA Holdings, which is mainly involved in shipping and property leasing and management business, yesterday said that it will be developing a US$41.5 million hotel in Vietnam.

The company will take a 65 per cent stake in a business contract to develop a five-star hotel in Hanoi, it said. Its Vietnamese partner will hold the remaining 35 per cent share in the project.

Vita Hospitality is expected to contribute about US$17 million for its 65 per cent share, while its partner, Dai Viet Trading Company, will in effect be contributing the land lease, the value of which is estimated to be at least US$6 million.

The remaining construction cost will be funded by bank borrowings, Vita said.

Construction of the 350-room hotel is expected to begin in early 2008 and be completed before 2010.

The venture will mark Vita's first large-scale property project outside Singapore and will also help it make further inroads into the hospitality business.

Vita has been trying to divest its shipping assets - it currently owns a fleet of nine ships - and move into the property business to ensure a steady revenue stream.

'Shipping is a volatile business,' Vita chief executive Loo Woei Harng told BT in an interview. 'We think that in the long-term, property is a more stable business.'

In line with this, Vita recently made its first foray into the hotel business in Singapore.

It is spending some $13 million to convert the former 12-storey Pearl's Hill Primary School on Chin Swee Road into a 140-room high-end boutique hotel.

Asia Water Tech to tap up to US$60m

ASIA Water Technology, a water purification and wastewater treatment specialist, is issuing up to US$60 million in structured and convertible bonds to take on bigger projects in China.

In a statement, the company said it will issue the bonds in two equal tranches, each comprising of US$15 million in structured bonds and US$15 million in convertible bonds.

The structured bonds carry interest of 3 per cent above the prevailing six-month London Interbank Offered Rate (Libor), while the convertible bonds can, subject to certain price adjustments, be converted at 93.6 cents.

Both the convertible and structured bonds have a five-year maturity period.

Separately, the group is also issuing some 11.4 million warrants to the bond subscribers.

Each transferable warrant, which has a six-year maturity period, carries the right to subscribe for one new share at 62.4 cents each, subject to certain price adjustments. When fully exercised, the warrants are expected to raise about US$5 million for the group.

According to Asia Water, the bonds have been fully taken up by several financial institutions such as Lucky Six Limited, a wholly owned special purpose vehicle of MezzAsia Capital LP and Indopark Holdings Ltd.

Asia Water said that the bond issue will enable the company to take on more large-scale build-operate-transfer, build- own-operate and transfer-operate-transfer projects in the tap water and wastewater treatment industry in China.

The rest of the proceeds will be used for corporate restructuring, refinancing of existing borrowings and general working capital requirements.