Singapore Corporate News - 25 Feb 2008

Unifiber inks deal with new partner

UNITED Fiber (Unifiber) has cancelled a multi-million-dollar deal with China National Machinery & Equipment Import & Export Corp (CMEC) and, instead, awarded the US$863 million contract to China Metallurgical Group Corp (MCC).

The contract is for the building of a bleached hardwood kraft pulp mill in Indonesia, which will have capacity of 600,000 air dry tonnes per annum. The mill had been planned since 2002 as part of the former construction firm's move to transform itself into a pulp and paper play.

Construction was held up for years, as the parties waited for regulatory clearance from both the Indonesian and the Chinese governments.

The contract had been awarded to China National Machinery & Equipment Import & Export Corp, which was to finance 80 per cent of the project. But Unifiber officials said in April last year that while in-principle approval had been received, China's State Council had yet to give the final green-light.

Yesterday, Unifiber said that 'after further consideration', its board decided that China MCC20, a subsidiary of MCC, was 'a more synergistic partner as the turnkey contractor'.

'The engagement of MCC20 will allow the company to advance forward with the project in a manner that is most timely', it said. Under the new agreement, MCC20 will design, procure and supply all machinery and equipment, and perform the civil work and installation required for the complete pulp mill.

Within a month, the parties are expected to finalise all major pending items, including the financial package, detailed construction programme and groundbreaking, upon which Unifiber will make further announcements.

'We are fully committed to the pulp mill project and we will make sure that it is successfully completed', said Jaka Prasetya, chief executive of Unifiber. 'The decision to partner with MCC20 is a strategic one'.

MCC20 is an integrated company that does engineering consultation, building and process design, purchasing, construction and project management.

Its parent, MCC, is a leading investor licensed by the Chinese government to develop natural resources. It is a major driving force behind China's steel industry growth, and has invested as much as US$1 billion in mining resources abroad. It owns many natural resource facilities, including 2 billion tonnes worth of paper production.

MCC had revenues of over 18 billion yuan (S$3.54 billion) in 2006, and is the only central enterprise allowed to run pulp-making and papermaking businesses in and outside of China.

Genting posts $381.5 m in losses

GENTING International recorded losses of $381.5 million for the full year ended December 2007 due to a massive impairment of goodwill arising from its acquisition of Genting Stanley in 2006. Genting recorded a 156 per cent year-on-year rise in revenues to $749.4 million.

C&G FY07 net profit increases 22%

C&G INDUSTRIAL, which manufactures functional yarns and polyester products, posted a 22 per cent year-on-year growth in net profits to 164.2 million yuan (S$32.3 million) for FY2007, thanks mainly to higher revenues spurred by increased capacity, it said yesterday. Revenues rose 24 per cent to 875.9 million yuan.

FibreChem FY07 net profit up 62%

FIBRECHEM posted a 62 per cent surge in net profits to HK$538.6 million (S$97.2 million) for the full year ended December 2007, as revenues rose 44 per cent to over HK$1.8 billion. This was thanks to higher contributions from a newly commissioned long fibre facility.

Hotel Royal earnings up sevenfold

AN EXCEPTIONAL gain of $31 million supported a sevenfold rise in earnings for Hotel Royal, from $37.73 million in the year ended December 2007, compared to just $5.16 million the previous year. A generally stronger tourism climate led to revenues rising 7.1 per cent to $30.96 million.

Hotung FY07 net profits up 28%

TAIWANESE venture capital fund Hotung Investment Holdings said that net profits rose 28 per cent to NT$465.82 million (nearly S$21 million) in the year ended December 2007, thanks to higher venture capital divestments resulting in large gains. Revenues rose 8 per cent to NT$1.09 billion.

PlastoForm losses at HK$28.3m

PLASTOFORM Holdings, which makes niche electronic accessories like speakers, sank into losses of HK$28.297 million (S$5.1 million) in FY2007, from profits of HK$54.04 million the previous year. Revenues declined 27.8 per cent to HK$360.71 million, due to decline in OEM orders.

Rise in sales by directors, substantial shareholders

THE buying remained low while the sales by directors and substantial shareholders rose again last week based on filings on the Singapore Exchange (SGX) from Feb 18 to 22. A total of 32 companies recorded 81 purchases versus 13 firms with 55 disposals. The number of acquisitions was consistent with the previous week's 79 purchases, while the sales were sharply up from 42. The fund manager activity was negative in terms of number of transactions for the second straight week, with nine institutions that posted 15 acquisitions against seven asset managers with 41 sales.

The number of purchases was down while the sales were sharply up from the previous week's 18 acquisitions and 33 disposals. With sellers dominating trading last week, the bulk of the significant fund manager trades were disposals.

Investors should trade with caution on See Hup Seng Limited, Hongguo International and Yangzijiang Shipbuilding as several institutional shareholders lowered their respective stakes to below 5 per cent in these firms at sharply below their initial filing prices.

Aside from directors and substantial shareholders, the buyback activity among listed firms was also flat last week with only three firms that posted 18 repurchases worth $17.5 million. The figures were in line with the previous week's three companies, 13 trades and $18.9 million. One firm that recorded significant buybacks last week was DBS Group Holdings as the group resumed buying at lower than its purchase prices last year.

DBS Group

Investment holding and banking & financing firm DBS Group Holdings (D05) resumed buying back at a lower price with 105,000 shares purchased from Feb 21 to 22 at an average of $17.93 each. The group previously acquired 1.4 million shares from Nov 12 to 27, 2007 at $20.00 to $18.90 each.

The trades by the company since November 2007 were its first buybacks since repurchases were introduced by SGX in June 1999. Aside from the recent buyback, The Bank Of New York Mellon Corporation became a substantial shareholder on Jan 24 following the purchase of 7.8 million shares at $18.37 each, which increased its deemed holdings by 11 per cent to 76.9 million shares or 5.1 per cent. The stock closed at $17.90 on Friday.

See Hup Seng

Prudential Asset Management (Singapore) Limited ceased to be a substantial shareholder of grit blasting and tank cleaning firm See Hup Seng Limited on Feb 18 following the sale of 687,000 shares at an estimated price of 45.5 cents each, which reduced its deemed holdings to 17.6 million shares or 4.9 per cent of the issued capital. The sale was made after the counter rebounded by 17 per cent from 39 cents on Feb 11.

The disposal by Prudential, however, was made at sharply lower than its initial filing price. The group previously reported an initial filing on Nov 9, 2007 of 403,000 shares at 74 cents each, which raised its interest to 5.1 per cent. The counter closed higher from Prudential's exit price to 49 cents on Friday.

Hongguo International

Schroder Investment Management Group lowered its stake in fashion shoes designer, manufacturer and retailer Hongguo International to below 5 per cent at sharply lower than its initial filing price.

The group reported a disposal-related filing on Feb 19 of 600,000 shares at an estimated price of 59 cents each, which reduced its deemed holdings to 19.6 million shares or 4.9 per cent.

Schroder previously reported an initial filing (for the second time) on Dec 28, 2007 of 135,000 shares at an estimated price of 89 cents each, which raised its interest to 5.02 per cent.

The sentiment is not entirely negative this month as NewSmith Asia Absolute Fund LP became a substantial shareholder on Feb 14 following the purchase of 396,000 shares at 57 cents each, which increased its direct holdings to 20.2 million shares or 5.1 per cent.

There were also buys by UBS AG and Moon Capital Management LP last month. UBS AG reported a purchase-related filing on Jan 9 of 253,000 shares at an estimated price of 85 cents each, which boosted its deemed holdings to 31.8 million shares or 8.01 per cent. UBS previously reported a purchase-related filing on Nov 19, 2007 of 1.2 million shares at an estimated price of 90 cents each and a purchase-related filing on Oct 26, 2007 of 541,000 shares at an estimated price of $1.12 each. UBS reported an initial filing on Oct 10, 2007 of 390,000 shares at $1.17 each, which raised its interest to 5.04 per cent.

Moon Capital Management, on the other hand, reported a purchase-related filing on Jan 9 of 3.4 million shares at an estimated price of 85 cents each, which increased its deemed stake by 12 per cent to 31.8 million shares or 8.02 per cent.

The group previously reported a purchase-related filing on Nov 13, 2007 of 4.4 million shares at an estimated price of 97 cents each and a purchase-related filing on Oct 18, 2007 of 3.9 million shares at an estimated price of $1.10 each.

Moon Capital reported an initial filing on Oct 9, 2007 of 590,000 shares at $1.17 each, which raised its interest to 5.1 per cent. The stock closed at 70.5 cents on Friday.

Yangzijiang Shipbuilding

Baring Asset Management Limited and FMR LLC & Fidelity International Ltd lowered their respective stakes in commercial vessel and container ships manufacturer Yangzijiang Shipbuilding to below 5 per cent at sharply lower than their initial filing prices. Baring Asset reported a disposal-related filing on Feb 1 of 6.6 million shares at an estimated price of $1.27 each, which reduced its deemed holdings to 159.9 million shares or 4.8 per cent.

The group previously reported an initial filing on Jan 14 of 5.1 million shares at $1.57 each, which raised its interest to 5.1 per cent. That initial filing price was 18 per cent lower than its exit price on Jan 4 when it sold 8.5 million shares at an estimated price of $1.92 each, which lowered its stake to 4.9 per cent.

FMR LLC & Fidelity International, on the other hand, ceased to be a substantial shareholder on Feb 18 following the sale of 32.4 million shares from Jan 16 to Feb 18 at estimated prices of $1.54 to $1.21 each, which lowered its deemed stake by 17 per cent to 164.4 million shares or 4.9 per cent. The group also sold 2.5 million shares from Dec 6, 2007 to Jan 15 at estimated prices of $2.15 to $1.46 each.

Prior to the disposals, the fund manager acquired 5.3 million shares from Aug 9 to Dec 5, 2007 at estimated prices of $1.51 to $2.74 each. FMR reported an initial filing on Aug 8, 2007 of 1.9 million shares at $1.81 each, which raised its interest to 5 per cent.

The sentiment is not entirely negative as director Teo Yi-dar acquired an initial 50,000 shares on Jan 21 at $1.39 each. The counter closed at $1.26 on Friday.