Singapore Corporate News - 11 Jan 2008

DBS involved in US$140m India deal

STANDARD Chartered, Credit Suisse and Singapore's DBS Group will buy a one-third stake in an Indian software and travel reservations firm for US$140 million, bank sources told Reuters.

Many mid-sized Indian software and back-office outsourcing firms, facing growth limitations and intense pressure from larger rivals, are eyeing private equity investment to expand business overseas and acquire companies to boost growth.

Standard Chartered confirmed the deal yesterday, saying that its private equity arm was the leading investor.

'We have led a US$140 million transaction, to acquire a stake in Interglobe Technology Quotient,' Nainesh Jaisingh, managing director of Standard Chartered's private equity arm in India, told Reuters.

'ITQ, which operates in the travel reservation distribution space, is uniquely poised to benefit from the high growth in domestic and international air travel business in India.'

InterGlobe Technology Quotient is part of India's unlisted travel group InterGlobe Enterprises, which also operates private IndiGo airlines. The firm has offices in 230 cities across India, says its website.

Officials at the Indian company were not available to comment. DBS and Credit Suisse declined to comment.

Back-office firms in India are struggling to retain staff because of rapidly rising outsourcing by Western companies that has pushed salaries sharply higher.

Despite this, private equity firms are eager to invest in them given the potential for above average growth in the technology sector, analysts say.

Blackstone Group bought an Indian back-office firm last year and Baring Private Equity Partners invested US$26 million for a substantial stake in a tech firm.

Indian software and services exports are expected to rise by 26-29 per cent to around US$40 billion in the year to March 2008 as demand for outsourcing remains strong, according to the National Association of Software and Service Companies.

New contracts boost CSC's order book to $330m

SINGAPORE ground-engineering specialist CSC Holdings has won $120 million of foundation and geo-technical contracts from the public and private sectors in the past two months.

The deals have boosted its order book to some $330 million as of Wednesday this week, the group said in an update yesterday.

The new contracts are expected to be largely completed within 12 months.

CSC said construction demand in Singapore remains vibrant, with new potential projects on the horizon from redevelopment in Orchard and Beach roads, a proposed bio-diesel complex, a solar panel manufacturing plant, Jurong Island petrochemical plants, Tuas pharmaceutical hub, Phase 2 of the Business and Financial Centre and increased public housing projects.

To help position itself for the boom, CSC recently proposed to acquire an investment holding company of Singapore's largest earthworks contractor, Kok Tong Group, and leading tunnelling and automatic monitoring survey specialist Wisescan Engineering Services.

CSC has also entered into a joint-venture with Malaysia-based IJM Construction, which has experience in civil, building and infrastructure works and has an extensive Malaysian and regional network.

CSC is also exploring opportunities in Vietnam and the Middle East.

'The construction boom in Singapore and the region has presented many exciting opportunities and we will continue to seize the day,' said its chief executive See Yen Tarn.

'As the market continues to grow steadily we look forward to more opportunities to grow alongside our existing and potential partners in the construction sector and enhance our stakeholders' value.'

Major foundation contracts won recently from the public sector include The Tree Lodge, a Housing Development Board (HDB) project for the green precinct development at Punggol West; Fusionopolis, a project at the one-north research and innovation hub; and sections of the Mass Rapid Transport Downtown Line extension.

Private sector deals won include foundation contracts for The Reflections at Keppel Bay, a high-end waterfront residential condominium; a hotel and commercial development at Collyer Quay; and Mont Kiara @ Eleven, a luxury condominium development in Kuala Lumpur.

For the first six months ended September 2007, CSC's revenue was $185 million. This surpassed group revenue of $127 million for the full financial year ended March 2007.

Ong Soon Kiat back at the helm of Goldtron

GOLDTRON Ltd has appointed executive director - and former executive chairman - Ong Soon Kiat as its new CEO. The electronics company has also appointed Choy Peng Lam as an executive director.

Mr Ong's return to the helm of Goldtron comes eight years after he had been forced to resign as executive chairman, and a director, in January 2000 following his conviction for market rigging in March 1999.

He was fined a total of $250,000 after he pleaded guilty to five charges accusing him of creating a false impression that trading in the counter was active between July and October of 1995. Three other charges against him of creating a false appearance with respect to Goldtron's share prices were taken into consideration.

His conviction had led the Registrar of Companies to ask him to resign from his directorships.

Mr Ong took legal action to obtain relief to act as a director, and the courts subsequently allowed him to continue as a director. Goldtron reappointed Mr Ong as an executive director in April 2000.

During Mr Ong's brief absence from the company, Goldtron appointed Mokhzani Mahathir, son of former Malaysian prime minister Mahathir Mohamad, as non-executive chairman, a post which he still holds.

Goldtron itself has been through much difficulty in recent years but now looks poised for a better future, after much restructuring.

Mr Ong founded Goldtron in 1992 after taking over the shell of listed Goldcoin Ltd. Goldtron was a stock market darling in the early 1990s. But it was brought to its knees after a costly $100 million bid to develop its own brand of mobile phones and pagers went wrong.

Since then, Goldtron has rationalised its electronic components distribution business. It is also looking to sell health supplements and products in China.

Goldtron shares closed unchanged at one cent yesterday.

Lian Beng's interim net up four times

CONSTRUCTION outfit Lian Beng Group has achieved a near quadrupling in net profit for the six months ended Nov 30, 2007.

Its first-half net income attributable to equity-holders was a record $8.06 million, up from $2.2 million for the corresponding period of 2006. This was due mainly to improved takings from its construction business. Revenue for the six months rose 23 per cent to $106.3 million. Earnings per share came to 1.72 cents, up from 0.48.

'The past half year has been very exciting, after a dry spell that lasted about 10 years,' said Lian Beng's managing director Ong Pang Aik. 'We managed to secure some interesting contracts, and were able to take advantage of the construction boom to expand our business activities.'

The group said its strong half-year results were due largely to better margins from its construction services, and higher revenue recognition from the progressive completion of construction projects.

Lian Beng said its construction division continued to be its key growth driver - contributing more than 90 per cent to its revenue. The remaining 10 per cent came from the engineering and leasing, and property development divisions.

The significant construction contracts that were added to Lian Beng's order book during the half-year included condominium developments at Toh Tuck Road and Simon Road.

The group expects the outlook for the construction and property sectors to remain relatively robust in the next six to 12 months. Lian Beng's construction order book stands at some $608 million to date.

'We will maintain our strategy of selectively tendering for larger scale construction projects in both the public and private sector, and will gradually strengthen our property development arm via suitable acquisitions and strategic alliances,' Mr Ong said.

Lian Beng shares closed 4.5 cents down at 74 cents yesterday.

Stamford Land names Tan Chin Nam director

STAMFORD Land Corporation, the hotel and property arm of shipping tycoon Ow Chio Kiat's Hai Sun Hup Holdings, has appointed recently-retired permanent secretary Tan Chin Nam to its board as an independent non-executive director.

Dr Tan, who is currently the chairman of the Media Development Authority of Singapore, replaces former KPMG managing partner Bobby Chin on Stamford Land's board as of Jan 4.

Mr Chin resigned as a director on Dec 31 last year following his appointment as chairman of The Straits Trading Company (STC) which, like Stamford Land, also has hotel interests in Australia. Besides smelting and mining, STC, one of Singapore's oldest companies, is also involved in hotel and property development. 'Mr Chin's resignation is to avoid any possible conflict of interest between STC and the company,' said Stamford Land.

Just last week it was announced that Tecity, the investment company of the late banker Tan Chin Tuan, was making a general offer for the 77.5 per cent of STC it does not own at $5.70 a share, and possibly taking it private.

Dr Tan, who began his career in the civil service with the Ministry of Defence, where he held key positions in systems and information technology, will also be a member of Stamford Land's audit and remuneration committees.

He was actively involved in Singapore's national computerisation programme which led to the formation of the National Computer Board (NCB). He was NCB's first chief executive from 1982 to 1986 and was its chairman between 1987 and 1994. Dr Tan was also managing director of the Economic Development Board between 1986 and 1994. He moved on to become the chief executive of the Singapore Tourism Board (STB) from 1994 to 1997 after which he became permanent secretary of the Ministry of Manpower (1998-2001).

He was permanent secretary to the Ministry of Information, Communications & the Arts from 2006 to the end of last year.

Mr Ow, who is Stamford Land's executive chairman, said: 'We feel that Dr Tan, given his previous position as CEO of STB, would bring a wealth of relevant hospitality experience to the board.'

Banyan goes to UAE's Saraya Islands

BANYAN Tree Holdings - which designs, develops and operates hotels, resorts, spas and retail galleries - has signed an agreement to operate a Banyan Tree resort in the Emirate of Ras Al Khaimah, United Arab Emirates.

The resort will be on the Al Sahab island, one of the four Saraya Islands located between the Hajjar Mountains and the Persian Gulf sea. The four islands, covering a total area of around 1.2 million square metres, will boast, among other features, five-star hotels and resorts, a marina, shops, restaurants and entertainment outlets.

Banyan Tree already has a desert resort development in the Emirate. The new resort will have 150 large suites overlooking the Persian Gulf, and a Banyan Tree spa and gallery.

The company's in-house architectural division will be handling both the architectural and interior design aspects of the resort, expected to be ready in late-2011.

Banyan Tree executive chairman Ho Kwon Ping said: 'Our strategy for Ras Al Khaimah has been to offer our guests an Arabian desert experience and beach resort within a stone's throw of each other.'

Banyan Tree has various properties in the region due to open over the next few years, including developments in Abu Dhabi and Oman.

Apple-brand reseller Afor launches IPO

AFOR Ltd, a retailer specialising in the sale of Apple brand products, kicked off Singapore's second Catalist listing this year with an initial public offering (IPO) of 23.5 million new shares at 33 cents each yesterday.

The IPO comprises one million public-tranche shares and 22.5 million placement shares. The invitation shares represent about 25.1 per cent of its enlarged share capital.

Afor is the first Apple premium reseller seeking a listing in Singapore. Recently, Old Chang Kee, best known for its curry puffs, also launched an IPO for a listing on Catalist, which has replaced Sesdaq. Like Old Chang Kee, Afor's listing application was made under the Sesdaq rules and the firm will be given a timeframe to comply with the new Catalist rules.

The IPO is expected to raise about $7.8 million, part of which will go towards business expansion.

Based on FY2007 net earnings of $3.47 million, the offer price is at a historical price-earnings ratio of 6.65 times.

Afor's chief executive Jimmy Fong said: 'The IPO launch is a significant milestone for our company as it will help to fund our expansion plans as we replicate our digital lifestyle store concept in Asia and grow.'

According to Afor, it is Asia's first Apple premium reseller, specialising in the sale of Apple brand products and its complementary products, through its EpiCentre stores located in Wheelock Place and Suntec City Mall.

Afor was awarded the 'Top Apple Point-of-Sale (Retail Store) in Asia 2007' this year.

It recently expanded its operations into Malaysia with the setting up of EpiCentre@Pavilion, at Pavilion Kuala Lumpur in September 2007.

'The increasing popularity of Apple products like the up-and-coming iPhone launch in Asia will no doubt augur well for their growth both in revenue and in profits,' said Nicholas Ng, chief executive of DMG & Partners Securities Pte Ltd, which underwrites Afor's IPO. The IPO opens today and closes on Jan 16. The trading of shares is expected to start on Jan 18.

US$2.5m Philippine project for Datacraft

DATACRAFT, a regional independent IT solutions provider, has won a project to help the Philippines' premier call centre and business process outsourcing provider, Advanced Contact Solutions (ACS), to expand and support its facilities to ensure business continuity. The US$2.5 million project will see Datacraft upgrade and expand the capacity of four of ACS's existing call centres as well as building two entirely new ones. The project will add nearly 2,000 more seats to address the business needs of ACS's clients.

SGX executive V-P Daniel Tan resigns

THE Singapore Exchange (SGX) said Daniel Tan, an executive vice-president, has resigned. His last day of service is March 31, 2008. The reason given was retirement. SGX CEO Hsieh Fu Hua said in a statement that Mr Tan has decided to seek fresh pursuits after 25 years with the exchange. Mr Tan, 49, has served in various senior management positions and made important contributions to SGX's development. He had been instrumental in the introduction of electronic trading and scripless settlement.

Top Global proposes rights issue

TOP Global is proposing a renounceable non-underwritten rights issue of up to 746.46 million new shares at an issue price of $0.025 each, with up to 559.845 million free detachable warrants with an exercise price of also $0.025. The issue will be made on the basis of two rights shares for every one existing share held, and three warrants for every four rights shares subscribed.

ASJ Hldgs warns of likely loss for 2007

ASJ Holdings yesterday warned that it may report a loss for the full year ended December 2007. It cited reasons such as lower sales to Europe, stock write-offs, and costs relating to the group's shift of its manufacturing facilities to Senai, Malaysia.