CapitaLand To Redevelop Orchard Road Site
CapitaLand announced its entry into an agreement with Ascott Residence Trust to acquire Somerset Grand Cairnhill Singapore today. The property, located in the heart of the prime district of Orchard Road, will be acquired for around $359 million. CapitaLand intends to jointly redevelop the site with The Ascott into CapitaLand’s first integrated development. The development is envisaged to comprise a serviced residence with a hotel license and a high-end residential development. In the same breath, CapitaLand will divest Ascott Raffles Place Singapore and its interests in Ascott Guangzhou to Ascott REIT for $283.3 million. Liew Mun Leong, president and chief executive officer of CapitaLand mentioned that the redevelopment will give the group an opportunity to combine its expertise in both serviced residences and residential developments to reflect its “integrated real estate value chain competencies”.
Significance: Altogether, CapitaLand expects to recognise a gain on these developments amounting to around $98.9 million in 2012. This would provide some earnings visibility in the near term. In addition, CapitaLand also entered into conditional agreements to divest the new Cairnhill development to Ascott REIT for $405 million in 2017.
STATS ChipPac Announces High Volumes For Its fcCuBE Technology
STATS ChipPac said in a media communiqué today, that it is experiencing high manufacturing volume for its innovative fcCuBE technology and that it was expanding its assembly processing capabilities. The fcCuBE technology is an advanced flip chip packaging technology that features copper column bumps, bond-on-lead interconnection and enhanced assembly processes. STATS ChipPac said that a unique feature of its technology is the ability to support both a standard mass reflow assembly process and a thermo-compression bonding process. Dr Han Byung Joon, executive vice president and chief technology officer of STATS ChipPac said that by expanding the capabilities of its fcCuBE technology, the firm would be able to provide its customers with a “new and unique degree of flexibility in choosing the process that best meets the cost and performance requirements of their specific application”.
Significance: The higher manufacturing volume would help to translate into higher top line performance as the firm is still grappling with costs from the Thailand floods in its 1Q12 report.
ST Engrg Proposal To Buyout Nera Fails
Minority shareholders of Nera Telecommunications have scuttled Singapore Technologies Engineering’s (ST Engrg) take-over bid for the company. ST Engrg had previously launched a $141.1 million bid to take Nera private as it planned to grow its communications infrastructure business. The plan was to pay shareholders a combined $0.45 a share with $0.06 per share payable by Nera as dividends and $0.39 a share to be paid by ST Engrg. The bidders had been unable to muster the requisite 75 percent majority votes even though, Eltek ASA, the 50.1 percent controlling shareholder of Nera had previously undertaken to vote in favour of the scheme. ST Engrg had previously told Nera shareholders that the proposal was presented as “an attractive opportunity for shareholders to monetise their investments” and also pointed out that the Nera’s shares were thinly traded. However, independent financial adviser, Deloitte and Touche said that the proposal was “fair and reasonable but not compelling”.
Significance: Despite the premium that was offered, shareholders might have found the proposal unattractive. This could also be due to the near tripling of Nera’s 1Q12 net profit to $6.5 million as further evidence that the counter could present further growth for existing shareholders.