Singapore Corporate News - 5 Apr 2008

OCBC sells Robinson stake to Al-Futtaim

OCBC Bank has decided to sell its 6 per cent stake in Robinson & Co to the Al-Futtaim Group. And, depending on whether its stake had been included when Al-Futtaim announced on Thursday the total number of acceptances it had received, the move could lead to Robinson being suspended or even delisted.

Robinson announced yesterday that OCBC has decided to accept the Al-Futtaim offer, and sold 5.194 million shares - representing a 6.04 per cent stake - to the Dubai-based group on Thursday. The bank retained 6,000 shares, or a 0.01 per cent stake, in Robinson.

OCBC will get about $37.40 million for the stake sold, with Al-Futtaim having raised its offer price to $7.20 a share on Thursday.

Critically, OCBC's move could now spell a change in fortunes for Robinson.

The bank had been one of the last major Robinson shareholders to tender into the offer. The Lippo Group, which had been the single largest shareholder, sold its 29.99 per cent stake to Al-Futtaim on Thursday.

Lippo's decision to accept the offer proved the turning point for Al-Futtaim, as it enabled the Middle Eastern investor to accumulate more than 50 per cent of Robinson's stock - turning the offer unconditional.

Al-Futtaim had a 23.18 per cent stake pledged to it earlier by Silchester International, Aberdeen Asset Management Asia and Tecity. And, along with acceptances of its offer which it had garnered along the way, Al-Futtaim managed to acquire a 60.8 per cent stake in Robinson by the close of its conditional offer at 5.30pm on Thursday.

The group then decided to raise its offer price further, from $7.00 a share to $7.20 a share, and extend its offer deadline from April 3 to April 30.

Following this announcement, Al-Futtaim said it had garnered even more acceptances of its offer - and its stake in Robinson grew to 87.19 per cent by 7pm on Thursday.

Al-Futtaim did not say if this 87.19 per cent stake included the stake sold by OCBC. If it did not, it would mean that Al-Futtaim's share of Robinson has increased further to 93.23 per cent, with OCBC's acceptance.

If so, under Singapore Exchange (SGX) listing rules, Robinson's stock could be suspended from trade - with its free float having fallen below the 10 per cent mark. That decision will be up to the SGX.

Also, under Singapore takeover rules, Al-Futtaim would then have the right to buy up the remaining shares it does not already own - and have the option of taking Robinson private.

It is unclear as to what Al-Futtaim intends to do, with the group not having made a comment by press time yesterday.

Al-Futtaim has said that it intends to build on Robinson's strong brand equity, and will work with the company's management to explore areas where Robinson can leverage on Al-Futtaim's retail expertise and expand the company's platform in the region.

Robinson shares closed up 32 cents at $7.18 yesterday.

SembCorp close to sealing Indonesia gas deal

SEMBCORP Industries looks set to conclude its deal to buy more Indonesian natural gas this month. The gas will be used to fuel its cogeneration plant as well as meet growing gas demand from petrochemical plants on Jurong Island.

This follows an earlier heads of agreement it reached with Premier Oil Indonesia last November to import an additional 90 billion British Thermal Units (BBtu) per day of gas from the Natuna Sea Block A field, which Premier operates.

The 26 per cent increase in gas will 'augment the 341 BBtu per day which SembCorp contracted for in 1999, supplied by the West Natuna Group of which Premier Oil is a member', the Singapore corporation said then.

The additional gas will primarily be used by its 815 MW cogeneration plant 'for process use and production of steam to meet growing demand by petrochemical industries on Jurong Island'.

'Some quantity of gas is also expected to be consumed by industrial and chemical customers.'

The Singapore group said at that time that the two sides had been in discussions since 2004 and that it expected to conclude the latest gas deal by the first quarter of this year.

Jakarta reports yesterday suggest that the new 15-year gas deal is expected to be signed soon, as the two sides are very close to concluding negotiations on the volume and price.

Indonesia will start exporting the additional gas to Singapore in 2011, should the contract be signed later this month, The Jakarta Post quoted an official from BP Migas, the country's oil and gas regulator, as saying.

BP Migas deputy chairman Eddy Purwanto reportedly said that the deal would replace the previous export contract which was terminated because Singapore failed to meet Indonesia's requirements.

He was apparently referring to BP Migas's cancellation last October of Island Power's deal to buy Indonesian gas from ConocoPhillips's gas field in Sumatra for its planned Singapore power station.

The axe came after several warnings by BP Migas that it would cancel the deal if the US-owned Island Power failed to secure gas transportation rights through the Singapore section of the existing Singapore-Sumatra pipeline. Island has, meanwhile, turned to the Energy Market Authority here to help it resolve this issue.

Under the expected SembCorp-Premier Oil deal this month, Indonesia will pipe the gas from the Gajah Baru field in Natuna to Singapore via the existing Natuna-Singapore pipeline.

SIAEC in $81m Philippines JV

IN A move which further widens its already considerably pan-Asian aircraft maintenance footprint, SIA Engineering has tied up with the Philippines' privately owned aviation group Cebu Pacific Air to establish an aircraft heavy maintenance facility at Clark International Airport.

The mainboard-listed SIAEC will hold a 65 per cent stake in the new venture - the company's 21st in its stable of joint ventures forged with airlines and original equipment manufacturers - while Cebu Pacific will hold the remaining 35 per cent.

The initial investment capital for the construction of three hangars, purchase of tools and equipment, and working capital is estimated to be $81 million.

The joint venture plans to construct the three hangars over the next three years to provide heavy and light maintenance checks for international airlines.

SIAEC, a Singapore Airlines (SIA) subsidiary, said in a statement that the Clark hangars would augment SIAEC's already extensive facilities in Singapore and provide it with the increased capacity and competitive cost structure to capture a larger share of the global maintenance, repair and overhaul (MRO) outsourcing business that is being directed to Asia.

William Tan, SIAEC's chief executive officer, said this was his company's second joint venture with Cebu Pacific.

'The hangars in Clark will complement our maintenance base in Singapore to provide world-class MRO services to our global customer base,' he added. 'We plan to invest strongly in the infrastructure and workforce to create a formidable and competitive MRO centre of excellence in the Philippines, which will create up to 1,100 new high value-adding jobs in Clark. We are confident that the high level of English proficiency and the diligence of the labour force in the Philippines will enable the operation to become a success.'

Lance Gokongwei, president and chief executive of Cebu Pacific, said the development of a premier MRO facility in Clark would attract a new wave of aerospace activities to the Philippines, while boosting the local talent pool of aerospace management and engineering personnel.

The combined revenue of SIAEC's joint ventures is about $2.4 billion in FY06/07. SIAEC has joint ventures in Singapore, the Philippines, Australia, Ireland, Hong Kong, Taiwan and Indonesia.

Swissco lands 2 contracts worth $14.4m

SWISSCO International's stream of offshore vessel charter contracts is continuing apace with the announcement of two more contracts with sale options worth $14.4 million.

Swissco unit Swissco Offshore signed a charter contract with an existing Australian client for a 40-metre anchor handling tug for a minimum charter period of one year. The contract includes an option to purchase the vessel.

The second deal is a three-year contract signed with an Indian company for shallow water oilfield work in the Indian sub-continent. The 26-metre shallow draft utility workboat will be deployed on the east coast of India to assist in drilling operations. This charter contract also includes an option to purchase.

'With our new offshore support vessels coming on stream progressively, we have been able to capitalise on the current demand for offshore vessels, not merely from the South-east Asian region, but also beyond,' said Swissco chief executive officer Alex Yeo.

'We are firmly committed to enhancing the capability and diversity of our fleet in our fleet expansion and renewal programme.'

Swissco is expected to take delivery of 12 new vessels this year and another five new vessels in 2009.

Net profit last year more than tripled to $40.2 million from $12.7 million previously while turnover rose to a record $31.2 million, up from $25.3 million previously. The company said, when announcing its results, that as it takes delivery of more new vessels, they are expected to contribute positively to its performance.

Westcomb founder retires

WESTCOMB Financial Group founder Choo Chee Kong has retired from his post as the company's deputy chairman and relinquished all his directorships and appointments within the group, except for his non-executive directorship with the company's dormant and 51 per cent-owned subsidiary, Westcomb Financial Group (HK) Ltd. This follows his divestment earlier of all of his interests in the company.

Macquarie reviewing proposals

MACQUARIE Pacific Star, manager of Macquarie MEAG Prime Reit (MMP Reit), said it was reviewing proposals from potential buyers for the trust.