Keppel Corp Snaps Up Stake In KrisEnergy
Keppel Corporation marked its return into the offshore oil business with a US$115 million acquisition of a 20 percent stake in KrisEnergy. KrisEnergy, which was set up by the founders of former-SGX listed Pearl Energy, currently operates six out of 14 licenses they hold in Cambodia, Indonesia, Thailand and Vietnam. The area of operations covers more than 63,000 square kilometres with certified proven resources of 14.4 million barrels of oil equivalent as of 31 December 2011. In 2011, KrisEnergy’s three producing fields averaged 4,800 barrels of oil equivalent per day. As part of the deal, Choo Chiau Beng and Loh Chin Hua who are Keppel’s chief executive and chief financial officers, will be appointed to KrisEnergy’s board as non-executive directors. Choo remarked that Keppel’s investment in KrisEnergy is underpinned by Keppel’s belief that KrisEnergy’s portfolio has long term growth potential and could offer substantial returns over the long run.
Significance: The deal could provide significant backing for a purported plan by KrisEnergy to return to the Singapore Exchange (SGX). In addition, KrisEnergy would be able to leverage on Keppel’s reach, technologies and experience garnered from its rig building activities.
Ascendas Plans To List Hospitality Trust In $823m IPO
Property manager Ascendas intends to list its hospitality arm in an initial public offer of up to $823 million. If the plan comes to fruition, the IPO will be Singapore largest this year. According to its preliminary prospectus, Ascendas Hospitality Trust plans to offer between 506.1 million and 529.6 million stapled securities at $0.88 to $0.94 per security. Each security will comprise one unit of Ascendas Hospitality Trust and one unit of Ascendas Hospitality Business Trust. The trust will initially hold 11 properties with 3,803 rooms and a total valuation of about $1.2 billion. Its initial portfolio will comprise Ibis Beijing Sanyuan, Novotel Beijing Sanyuan, Ariake Sunroute, Pullman Ambassador Changwon City and all of Ascendas Australia Hotel Fund. The trust has plans to distribute all of its distributable income until 31 March 2014, and at least 90 percent thereafter. Annualised distribution yield is forecast at 7.4 percent for the year ending 31 March 2013 and 7.7 percent for the year ending 31 March 2014.
Significance: Although the trust has exposures in China and Australia, the jury is still out on the probable performance of the listing. However, with assurances on its distribution policy, the listing could see weary investors flocking to the counter as a safe haven in volatile times.
StarHub Rolls Out 4G To Selected Buildings
StarHub intends to roll out its 4th generation (4G), long-term evolution (LTE) service in the central business district, where major banks have offices and Changi Airport later this year. StarHub also intends to use a new fibre-optic grid to get clients in commercial buildings in the suburbs. Almost 95 percent of StarHub’s new customers are buying smartphones, devices that can be used to surf the Web, play and record high-quality movies and photographs and create documents. According to StarHub’s spokeswoman, about 80 percent of the company’s 1.1 million post-paid customers are already using smartphones. Neil Montefiore, chief executive of StarHub said that its push into the corporate data services was a “game changer” and will give the company “more access to a market that’s still a monopoly”. Montefiore said that besides the corporate data services business, he is optimistic that mobile revenue will continue to grow as StarHub seeks to bring its pay television content to handsets and other devices.
Significance: The push into 4G LTE will enable StarHub to cross-sell its content while the corporate data services will enable StarHub to tap on small and medium enterprises as an avenue for growth.