Stamford Land Enters MOU To Sell Three Aussie Hotels
Stamford Land Corporation (Stamford Land) has entered a non-binding memorandum of understanding (MOU) to sell three hotel properties in Australia – namely Stamford Plaza Melbourne, Stamford Grand Adelaide and Stamford Plaza Sydney Airport. The indicative sale consideration was put at A$316 million ($398.6 million), which is more than double their mid-2011 combined net book value of A$148.7 million. It was noted that the group would continue to manage and operate the hotels under long-term, leaseback arrangements.
Significance: According to Stamford Land’s executive director Ow Yew Heng, the group’s strategy is to stay nimble and consider all options. This includes suitable financing/capital recycling strategies such as sale and leaseback of its properties and injection of its property assets into real estate investment trusts.
SATS Still In Discussion On Sale Of UK Unit
SATS has issued clarification on news reports about sale of its British food brand unit Daniels Group. The company noted that there are ‘discussions with third parties’, however stressing that ‘there is no certainty that a definitive agreement may be arrived at’. The clarification was in response to reports that said SATS had put the Daniels Group on the market. Accordingly, a Sky News blog said that SATS was asking for ‘about £150 million ($304.7 million)’ while another report by food business website The Grocer put the asking price as ‘at least £200 million’.
Significance: SATS acquired The Daniels Group as part of its takeover of Singapore Food Industries in Jan-09. The unit recorded revenue of about £160 million a year from the manufacturing and sale of fresh soup, chilled drinks, fresh fruit, ready-to-eat meals and puddings. If the disposal were to go through successfully, proceeds would likely be channelled to strengthen its core businesses.
AVIC Suspends Construction Of Two Vessels
AVIC International Investments (AVIC), the company which recently acquired the listing status of Sino-Environment, has suspended the construction of two vessels. The two are among nine vessels to be constructed by Huanghai Shipyard with delivery scheduled between 2011 and 2012. The suspension was placed following a request from the customer, it was agreed that construction of the two vessels would resume upon mutual agreement and that delivery of the remaining seven vessels would be re-scheduled. Meanwhile, shares of the company remains suspended from trading as it is pending completion of a share placement to meet listing requirements.
Significance: AVIC noted that progress payments amounting to 30% of total contract value of the two suspended vessels have been received, these monies are non-refundable unless there is a breach of the contract on its part. Nevertheless, worries linger on as the slowdown in global trade would potentially point to more suspension and cancellation of orders.