Singapore Daily Bulletin – 11/01/13

Nam Cheong Proposes Placement To Raise $47m
Malaysia’s largest offshore support vessel builder Nam Cheong proposed to raise capital for its shipbuilding and vessel chartering business through the placement of about 190 million shares at $0.255 per share. The placement price represents a discount of approximately 9.7 percent to the weighted average price of $0.2824 on the full market day of 10 January 2013. Assuming the successful placement of the shares, the net proceeds of the placement, after deducting all costs, expenses and commissions payable in relation to the placement will be at about $47 million. As at 27 December 2012, Nam Cheong’s order book stood at RM1.5 billion.

Significance: Of the net proceeds raised, 70 to 90 percent of the net proceeds will be used towards financing expenditure for shipbuilding projects and vessel chartering business. The rest of the proceeds will be used for refinancing of existing borrowings, and general corporate purposes of the company and its subsidiaries.

ST Engineering’s Aerospace Arm Secures $450m Contracts In 4Q12
Singapore Technologies Engineering’s (ST Engineering) Aerospace arm has wrapped up 4Q12 with new contracts worth about $450 million. The new contracts are for airframe, component and engine maintenance, as well as engineering and development. In 4Q12, ST Aerospace redelivered 165 aircraft for airframe maintenance and modification work. For passenger-to-freighter conversions, it redelivered five converted Boeing 757-200 freighters, bringing the total redelivery last year to 16. ST Aerospace also processed 9,847 components, 61 landing gears and 78 engines for both commercial and military customers. It added a narrow-body aircraft hangar at its Changi facility, expected to begin operations by the end of third quarter this year, for its airframe maintenance, repair and overhaul business. In US, VT Aerospace completed the acquisition of a full stake in Volant Aerospace for US$13.1 million while on cabin refurbishments front, it won a contract for the interior modification of a Boeing 767-200ER VIP aircraft.

Significance: Notably, ST Engineering’s Electronics arm had also secured $192 million worth of contracts in 4Q12. Although the developments are not expected to have any material impact on its financial performance for the current financial year, its strong contract inflow provides earnings visibility for the company.

Interra Resources Moves Listing To Mainboard; Sets Sight On Further Expansion Opportunities
Interra Resources moved from the Catalist to the Mainboard yesterday with Canaccord Genuity Singapore ceasing to be its sponsor. Meanwhile, the company plans to increase production by extracting more from its current oilfields as well as exploring new assets. Notably, Interra Resources became part of Saratoga Capital operationally after a share restructuring exercise last year and under the wings of the private equity group, Interra Resources will gain access to new capital and deal flow. Marcel Tjia, chief executive officer of the company, highlighted that being part of a much larger umbrella has its advantages as it allows access to deal flow and people, such as opening opportunities to clinching deals for exploration rights. It holds full rights to an onshore field in South Sumatra and West Papua separately, besides the newly acquired rights to the Kuala Pambuang Block, which came about due to information from companies managed by Saratoga.

Significance: As one of the few Myanmar-focused plays on the Singapore Exchange, Interra Resources had seen its shares quadruple last year from an initial price of $0.115 cents in January. Myanmar accounts for about two-thirds of its revenue and it owns 60 percent of the rights to two onshore oilfields in the country, spelling potential upside as the country undergoes economic reforms.