Singapore Daily Bulletin – 09/01/13

Mapletree To Invest Rmb3b Into Guangdong Project
Mapletree Investment, the parent behind three real estate investment trusts (REITs) listed on the Singapore Exchange (Mapletree Commercial Trust, Mapletree Industrial Trust and Mapletree Logistics Trust), is looking to invest Rmb3 billion into a business park project in China’s Guangdong province. The project has a total land area of 260,000 square metres (sqm), and will cover gross floor area of over 500,000 sqm that comprise of 23 office buildings as well as 5,600 parking spaces. According to a statement yesterday, Mapletree group CEO Hiew Yoon Khong said the project will benchmark itself to Singapore’s Grade A office features and aim to attract companies looking to set up regional headquarters or large back-office operations.

Significance: Mapletree owns and manages $19.9 billion of properties as at 31 Mar-12. In particular, it had reportedly hired several banks to manage an initial public offering (IPO) of a REIT that would have only Chinese assets. This IPO is expected to reach market in first half of this year and will raise US$1 billion.

Logistics Holdings Sets For Catalist Via 42.1m Shares Placement
Logistics Holdings, a construction company that focuses mainly on public-sector projects, has launched an IPO for a Catalist listing via placement of 42.1 million shares at $0.23 apiece. The listing comprises of 10.2 million vendor shares and 31.9 million new shares, which are expected to raise net proceeds of approximately $6 million. The company intends to utilise $2 million each in its expansion plans and joint venture and strategic alliance plans, with the remaining to be used for general working capital. For the fiscal year ended 30 June 2012, it posted revenue of $64.1 million with public-sector projects accounting for 99.7 percent of the make-up while total comprehensive income of the group attributable to equity-holders came in at $5.2 million. Application for the shares closes on 16 January, and the counter is scheduled to start trading on 18 January.

Significance: Logistics’ issue price of $0.23 is 6.1 times its audited earnings per share of $0.038 for FY12. According to its prospectus, the company intends to “recommend and distribute not less than 20 percent of its profit attributable to shareholders for FY13″.

United Envirotech To Receive US$40m More Investment From KKR
United Envirotech, a water treatment and recycling solution provider in China, has proposed to issue 98.5 million new shares to US-listed KKR. The issue price is set at $0.50 apiece, representing an 8.5 percent premium over its volume-weighted average price for the last 30 trading days. The new shares are equivalent to 11 percent of the enlarged share capital, and command a consideration amount of US$40 million. Notably, KKR had in 30 Jul-11 subscribed for US$113.8 million of convertible bonds; given completion of the new share issuance as well as full conversion of bonds and outstanding options, KKR would hold a direct interest of 45.2 percent. In a separate announcement, United Envirotech has entered into a $35 million investment to purchase 350 million shares or a 13.2 percent stake in Memstar Technology – this deal is expected to strengthen strategic relationship between the two parties and help Memstar grow its membrane sales in water and waste water treatment plants across China.

Significance: Enhancement of water infrastructure is one of the key emphases in China’s 12th Five-Year Plan. Given the positive outlook in the near term, it is little surprise that foreign investors such as KKR are eager to tap into the opportunities.