Singapore Corporate News - 3 Jan 2008

US$1.27b, 20-vessel deals for Yangzijiang

YANGZIJIANG Shipbuild-ing Holdings said that it secured shipbuilding contracts for 20 vessels worth a total contract value of about US$1.27 billion last month. The new contracts are to be delivered before July 2012, and will not have a significant impact on the earnings of the group for the financial year ended Dec 31, 2007, said the company. Current contracts on hand are for 158 vessels with a total contract value of US$6.9 billion.

SGX rejects Auston's M2B takeover proposal

THE Singapore Exchange (SGX) has told Auston International Group that its proposed reverse takeover deal involving the acquisition of M2B World Asia Pacific is 'not acceptable'. Auston, which disclosed this yesterday, said it intends to continue exploring alternative investment opportunities with M2B.

SATS sells courier hub to DHL for $38m

SINGAPORE Airport Terminal Services (SATS) has sold its SATS Express Courier Centre Two (ECC2) to DHL Express (Singapore) for $38 million.

The price is a premium to the $35 million open-market valuation of ECC2 as at end-2007 and its net book value of $20.89 million as carried in SATS' books at Sept 30, 2007.

ECC2, located in the Singapore Changi Airport Free Trade Zone, has a total floor area of about 18,000 sq m and was purpose-built by SATS for DHL's Singapore hub operations.

It has been occupied largely by DHL since September 2001, with SATS taking an area of just 940 sq m for maintenance of ground-handling equipment. DHL will lease the same space in ECC2 to SATS.

The facility can process 5,300 shipments per hour and is expected to increase its capacity to more than 11,000 shipments per hour in 2011. DHL Express Singapore Hub handled a record kilo volume in the year 2007 that is expected to have exceeded 2006 performance by 12 per cent.

Stephan Fenwick, senior vice-president for operations at DHL Asia Pacific, said the company's infrastructure in Singapore was a critical component of its express hub network in the Asia-Pacific. 'Our six strategically located hubs in Bangkok, Hong Kong, Incheon, Shanghai and Sydney, which are linked to close to 50 gateways throughout Asia, ensure we are ideally placed to service the expected future growth in trade, especially between Asean and China.'

Clement Woon, president and CEO of SATS, said the sale of ECC2 was an initiative to help its customer expand its operations and anchor its presence in Singapore. He said SATS will continue to provide cargo-handling services to DHL following the sale.

Assuming the transaction had been completed on Sept 30, 2007, the net gain of $15.23 million from the sale would have increased SATS' net tangible assets per share by about 1.42 cents. Assuming that the transaction was completed on April 1, 2007, earnings per share for the six months ended Sept 30 would have increased by about 1.39 cents.

Chip Eng Seng signs Vietnam deals

CONSTRUCTION and property group Chip Eng Seng has signed separate agreements to develop two residential projects in Vietnam.

The first is a 20 per cent stake in a business co-operation deal with two local partners there to build a 782-unit condominium in Ho Chi Minh City's District 8. The total development cost is estimated at $90 million, Chip Eng Seng said in a statement.

The local partners are Vinh Tien Joint Stock Company and Hoa Binh House Joint Stock Company, which will hold 41 per cent and 39 per cent of the project respectively.

The second deal is for a 25 per cent stake in Viet Investment Link Joint Stock Company (VL). Chip Eng Seng and VL are talking with another local partner to develop a condominium on a 7,000-square-metre site in Ho Chi Minh City's District 2.

Chip Eng Seng said that its stake in VL will rise to 49 per cent this year. The total development cost is estimated at $90 million.

Both projects should be launched in the second half of the year, and Chip Eng Seng said that it will also provide project management and consultancy services for both.

The investments, each held through a wholly owned subsidiary, is expected to contribute positively to its net tangible assets and earnings per share for its current financial year.

The deals are its first in the country since it took a 5 per cent stake in a listed Vietnamese construction company, Hoa Binh Construction & Real Estate Corporation, last July. The tie-up has brought 'good equity returns and excellent business opportunities', Chip Eng Seng said.
The company is setting up an office in Ho Chi Minh and is considering investments in hotels and commercial and retail properties in the country.

Chief executive officer Raymond Chia said in a statement: 'The Vietnam market is roaring with potential. Our investment in this market is taken with a long-term view. I see Chip Eng Seng becoming one of the key foreign investors in Vietnam.'

The company plans to expand extensively through the region, Mr Chia said. It is also looking for opportunities in Bangkok, Kuala Lumpur and China.

'In three years, I am looking to have 30 per cent of our revenue and profit coming from the overseas market,' Mr Chia added.

CCT to build $1.5b S'pore office property

CapitaCommercial Trust (CCT), a Singapore-listed office property trust, said on Thursday that it would redevelop a downtown carpark complex into an office building for up to $1.5 billion (US$1 billion).

Work on the Market Street Carpark located in Singapore's central business district will begin in late 2008.

CCT is managed by a unit of CapitaLand, Southeast Asia's largest developer by market capitalisation.

Raffles Education proposes one-to-two stock split

RAFFLES Education Corporation has proposed a stock split. The education provider told the Singapore Exchange (SGX) yesterday it plans to divide each of its issued shares into two.

'The sub-division will increase the affordability, accessibility and liquidity of the shares of the company available for trading on the main board of the Singapore Exchange,' Raffles Education said.

As of yesterday, the company had almost 1.14 billion shares in issue. The split, which will double the number to 2.28 billion, is subject to the approval of the shareholders at an extraordinary general meeting, yet to be convened, and regulatory approval from SGX.

In November last year, Raffles Education, which runs 28 private schools in Asia, posted a 57 per cent rise in first-quarter net profit to $14.7 million for the period ended Sept 30.

The result was on a 45 per cent rise in revenue to $39.1 million. The company also said it would carry out $200 million a year of acquisition deals in China, India and Vietnam for the next three years.

The company's share price dropped six cents or 2 per cent to close at $2.98 yesterday.

Golden Agri proposes 1-for-2 share split

Singapore-listed palm oil firm Golden Agri-Resources Ltd proposed on Thursday a one-for-two share split to boost liquidity in its shares.

The share split is subject to approval from shareholders and the Singapore Exchange, said the firm, which is controlled by Indonesia's Widjaja family.