Singapore Corporate News - 27 Aug 2007

Rowsley's reverse takeover by Perfect Field delayed

ROWSLEY Ltd's reverse takeover by Chinese solar energy firm Perfect Field Investment has been delayed, said the firm yesterday.

In a statement to the Singapore Exchange, Rowsley chief executive Koh Kim Huat said its due diligence checks on Perfect Field showed that 'there has been a delay on the part of the target group in meeting certain expected production capacity milestones'.

Rowsley is 'further investigating the delay to assess its impact on the acquisition' and it expects to make another announcement to its shareholders on the status of the deal by end-September, it added.

On May 2, the company said it had signed a conditional agreement to acquire the entire share capital of Perfect Field, which makes photovoltaic thin-film solar cells, for $2.7 billion, through the issue of 18 billion new shares in Rowsley.

One of the conditions of the deal was that Perfect Field achieves a production capacity of 100 megawatts (MW) by end-October.

The deal would give Totalpro Group, the holding vehicle of Perfect Field's shares, a 92 per cent stake in Rowsley. Totalpro is controlled by Perfect Field's founder, Chinese scientist Ma Xin.

As part of the deal, Rowsley would have to inject at least $150 million into the new entity to meet the expansion needs of the group.

At the time, Rowsley said it had signed a conditional agreement with its largest shareholder, well-known former remisier Peter Lim Eng Hock, who would buy one billion new shares in Rowsley for $150 million in cash.

Under the agreement, Perfect Field also provided a net profit guarantee of at least $300 million for each of the financial years ending June 30, 2008, 2009 and 2010.

Another condition of the agreement was that Perfect Field achieve a net profit of at least 70 million yuan or about $13.7 million for the year ended June 30, 2007.

Rowsley has not said if this last condition has been met. Last week, BT had questioned how the net profit guarantees would be met, since Perfect Field recorded revenue of just 28 million yuan (S$5.62 million) and pre-tax profit of 23.4 million yuan for the nine months to end-March, while its production capacity as at May is just 10 MW.

CDL may seek partners to expand overseas

CITY Developments Ltd (CDL) is looking for opportunities to expand to regional markets like Korea, and could be seeking new partners in the process.

CDL announced earlier this month that it had signed a memorandum of understanding with Korea's DC Chemical Company Limited (DCC) to develop a large scale integrated commercial centre in Incheon, Korea.

CDL also said that it was looking to invest between US$150 million and US$300 million in equity in the development together with 'affiliates'.

CDL declined to name its affiliates, but a possible partner could be the Dubai investment company, Istithmar.

In June, CDL and Isthimar each took 40 per cent stakes in Tune Hospitality Investments to develop 30 budget hotels across South-east Asia.

It was also reported earlier that Istithmar is planning to buy Asian property assets worth at least US$250 million and expects its real estate portfolio in the region to double in size by year end.

CDL is already active in Korea. Besides the five-star Millennium Seoul Hilton Hotel, it developed and sold three commercial projects there. Other non-hospitality projects in Asia include the Umeda Pacific Building in Osaka and The Exchange Tower in Bangkok.

The Incheon site that it is eyeing measures 1.55 million sq m and is mostly owned by DCC and its affiliates.

DCC is a producer of carbon black, soda ash and pitch.

The anchor facility on the 1.55 million sq m site is an integrated commercial centre on a 281,850 sq m parcel of land which will comprise a five-star hotel, a Grade-A office tower, a serviced residence, a retail podium and other mixed-use facilities.

CDL said that another 380,000 sq m parcel of land north of the integrated commercial centre has been slated for residential development.

China Energy completes acquisition

CHINA Energy, a producer of dimethyl ether (DME) fuel, said it has completed a 400 million yuan (S$80.3 million) acquisition of new facilities that will quadruple its production capacity.

The purchase, first announced at the time of its listing here last December, will raise its current DME production capacity from 150,000 metric tonnes a year to 600,000 tonnes.

The group said it expects the acquisitions to contribute 'positively' to its earnings for the current financial year.

It is paying 200 million yuan for the DME production assets of Shandong Jiutai Chemical Technology Co, which will add 250,000 tonnes in production capacity. It is also acquiring the entire share capital of Jiutai Energy Guangzhou Co, which has 200,000 tonnes of capacity in Guangzhou of Guangdong province, for 197.8 million yuan.

Both acquisition targets are part of the original Jiutai group of companies established in China in 2002 and 2003. Most of their assets were consolidated under Singapore-incorporated China Energy before its listing here.

Conditional agreements for the latest acquisitions were signed in November last year, just before China Energy's mainboard listing in December.

The acquisitions will be funded from the proceeds of its public offer, as stated in its prospectus at the time. The firm's initial public offer raised $237.5 million.

Development work is scheduled to begin in 2009.