Chasen Clinches Projects, Establishes JV
Chasen Holdings’ 51 percent owned subsidiary, Hup Lian Engineering has clinched two local engineering projects worth about $4.1 million. The first contract (worth $2.6 million) relates to a new landmark project located at a prime site in the Jurong East vicinity. Hup Lian is contracted to design, supply and install structural steel and metal works for the upcoming mall and office tower. The second contract (worth $1.5 million) entails the supply and installation of steel, metal structures and metal roofing works at a new plant in the Tuas South area. Low Weng Fatt, managing director of Chasen mentioned that the string of contracts won provides a good momentum for Chasen but pointed out that mega construction projects have dwindled after the conclusion of the integrated resorts. Separately, Chasen’s wholly owned subsidiary, Global Technology Synergy has signed an agreement with HK YongAn International Investment to establish a joint venture company (JVC). The JVC will carry out the operations and management of infrastructure projects such as water treatment or any environmental protection related projects.
Significance: The slew of contracts signed by Chasen has undoubtedly raised the profile of the company. In addition, the joint venture agreement will help to facilitate Chasen’s move to enter into the Chinese infrastructure market.
Adviser Shuns Privatisation Offer by F&N
A proposed privatisation deal involving Fraser & Neave (F&N) and its subsidiary Frasers Property (China) has hit a bump. The independent board committee (IBC) that had been set up to advise shareholders on the deal, together with CIMB have advised shareholders to vote against the privatisation plan by F&N. Shareholders of the subsidiary will be voting on the proposed deal on 30 July 2012, which will pay them HK$0.28 per share. The advisers called the terms “not fair and reasonable” in the scheme document posted on the subsidiary’s website. In addition the board of the subsidiary highlighted a new adjusted net asset value (NAV) of HK$0.525 a share in a filing to the Singapore Exchange yesterday. As a result the offer price would be at a “considerably deeper” 46.7 percent discount. However, F&N said in a letter to shareholders that the proposal offers a cash exit opportunity at a premium to market prices, and some comparable listed property peers are trading at higher NAV discounts than the company’s privatisation offer.
Significance: While the advice by CIMB to the IBC is negative, there is no assurance that if the deal is scuttled, that the current trading price – which shot up to HK$0.27 – will remain at that level.
Esteemed Businessmen, Tony Chew Buys Into Intraco
Tony Chew, through his investment company, Asia Resource Corporation (ARC) bought up 20.99 million Intraco shares at $0.56 from Oei Hong Leong in a married deal on 4 July 2012. ARC picked up a further million shares from Macondray in a separate deal on the same day to raise his shareholding in Intraco from nil to 22.3 percent. Chew, ARC’s executive chairman said that the strategic stake in Intraco was a testament of ARC’s belief of the intrinsic value of Intraco’s “history and pedigree, and good potential for the organisation to rebuild itself”. The purchase of Intraco’s shares also attracted attention from investors as Chew had bought the stake just weeks after Oei had worked very hard to acquire the stake. Oei said that he sold the stake after realising how illiquid the stock was, and that it was difficult for him to pick up more shares to eventually gain a controlling stake.
Significance: Seeing and being able to harness the potential in businesses is something Chew has often been credited with. This is particularly important as Intraco recently reported steep losses in its FY11 report.