Singapore Daily Bulletin – 02/04/13

CapitaLand Restructures Surbana Corp
CapitaLand is restructuring its 40 percent owned Surbana Corporation’s residential development and consultancy businesses. It is integrating Surbana Corporation’s residential development business into CapitaLand China. Puah Tze Shyang, chief executive officer (CEO) of Surbana Land, will continue helming the residential development business as its CEO and will report to Jason Leow, CEO of CapitaLand China. In the last eight years, Surbana has established itself as a premium residential developer with five developments located in Chengdu, Shenyang, Wuxi and Xi’an in China, with a gross floor area of approximately six million square metres. Geographically, China is one of CapitaLand’s core markets with a portfolio accounting for $13.4 billion or 39 percent of the group’s total assets as at end 2012.

Significance: More importantly, the restructuring of Surbana Corporation gives the residential development and consultancy businesses greater focus to pursue growth, while the integration of the residential development business into CapitaLand China will enable CapitaLand to reap synergistic benefits.

euNetworks Plans 50-Into-1 Share Consolidation
euNetworks Group proposed to undertake a 50-into-1 share consolidation, which it says will simplify the company’s capital structure, increase the attractiveness of its shares in the market, and decrease the volatility of its share price. The Singapore Stock Exchange (SGX) has given the nod for euNetworks to list and quote the consolidated shares on the Catalist board, but euNetworks still needs shareholders’ approval at an extraordinary general meeting to be convened. For illustrative purposes, the market price of the shares as at the close of the market day on 1 April 2013 on which the shares were traded on the SGX is $0.016 and upon completion of the proposed share consolidation, the theoretical share price of each consolidated share is $0.80, the bandwidth infrastructure provider said.

Significance: euNetworks is aware that the capital structure is not optimal to maximise shareholder value. In fact, the firm is a penny stock and the volatility of the share price all, and cumulatively, in the opinion of the company, may limit the potential for growth in shareholder value.

Otto Marine Sells Vessel For US$50m
Otto Marine’s shipyard has, through its subsidiaries, sold a multi-purpose field support and ROV support Vessel named “Otto Explorer 3″ to RY Offshore for about US$50 million ($62 million). Upon completion of the sale, RY Offshore will charter the vessel to the Otto Marine’s unit, Go Marine Group. Otto Marine has received the deposit of US$1 million from RY Offshore for the transaction with the balance to be paid upon delivery of the Vessel to RY Offshore. RY Offshore is 29 percent held by Otto Marine’s chairman and group CEO Yaw Chee Siew. Its remaining interest is owned by unrelated third parties.

Significance: The aforesaid transactions are expected to contribute positively to Otto Marine’s net tangible assets per shares or earnings per share of the firm for FY13.