Golden Agri In JV With Stena Weco
Danish transport giant, Stena Weco – a joint venture between Stena Bulk and Weco – has signed a joint venture agreement with Golden Agri-Resources – world’s second largest palm oil plantation company. The 50-50 joint venture which will birth the company, Holden Stena Weco, will be able to provide an overall solution for Golden Agri’s international transportation of its palm oil products. Stena Weco is currently one of the world’s largest transport companies for palm oil with a major market share in the Asia to Europe route. The new joint venture company will help to extend this strength to intra-Asia transportation. Jesslyne Widjaja, vice president of corporate finance at Golden Agri mentioned that the joint venture partnership will allow the company to “achieve competitive freight rates and better manage the transportation needs” of Golden Agri’s palm oil exports with particular emphasis in Asia. Widjaja added that the joint venture will help to ensure that Golden Agri continues to be a world-class palm oil player.
Significance: Competitive shipping rates could go some ways in providing some margin support for Golden Agri. In its 1Q12 report, the firm had listed lower gross profit margins as a drag on its earnings.
KepLand Eyes Indon Property Sector
In an interview with The Business Times, Keppel Land said that it plan to develop more residential and commercial properties in Indonesia. In reply to the financial newspaper, the firm pointed to Indonesia’s resilient economy, rising foreign direct investment and declining interest rates as boons to the Indonesian property market. In its opinion, these factors have helped to buoy demand for homes, and office and retail space. Tan Swee Yiow, KepLand president of Singapore commercial and head of regional investments mentioned that the company is currently looking to focus on the residential segment in the Greater Jakarta region. Strong uptake rate in KepLand’s integrated township project, Jakarta Garden City of 95 percent, attests to KepLand’s opinion of the strong property sector there. According to Tan, KepLand is also keen to undertake more commercial projects in Indonesia. The firm has an office development in Indonesia called the International Finance Centre, Jakarta (IFC). The project will have two office towers offering prime Grade A column-free office space.
Significance: KepLand has more than 10 development projects across Indonesia to date. As at the end of 1Q12, Indonesia accounts for roughly 4 percent of KepLand’s total asset distribution. With the focus in mind, this amount could increase significantly.
Blumont To Privately Place 250m New Shares
Blumont Group announced on 28 June 2012 that it had entered into separate agreements to issue about 250 million new ordinary shares at $0.0265 apiece to four subscribers introduced by its executive chairman, Neo Kim Hock. None of the four subscribers will have shareholdings of above 5 percent after the completion of the placement. The issue price is about 8.62 percent lower than the weighted average price of $0.029 for each share, based on trades done on 27 June 2012. Blumont estimates that net proceeds from the placement would be about $6.6 million. Of this amount, about 30.3 percent will be used to fund working capital requirements while the remaining amount will be used to fuel the growth and business expansion of the group.
Significance: The placement exercise and intended use of proceeds could help spur the company’s growth as it looks to property markets in the region for suitable development opportunities.