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Singapore Daily Bulletin – 12/12/12

Kori Makes Positive Run On Debut, Closes Up 14%
Kori Holdings, an engineering and construction services company, made a positive run on its Catalist debut yesterday. Shares of the debutant opened at $0.30, traded all the while above its initial public offering (IPO) price of $0.25, and closed up $0.035 or 14 percent higher at $0.285. The counter was one of the most actively traded, with volume done of 47.3 million shares. The Singapore-based company counts structural steelworks and tunnelling services as its core businesses; its IPO of 28.2 million shares comprised of 25.6 million new shares and 2.6 million vendor shares, of which new shares raised net proceeds of approximately $4.4 million.

Significance: Kori plans to allocate $1 million to acquire a plot of land in Iskandar, Malaysia to relocate its Singapore storage yard next year. Also, it looks to increase its presence and expand in overseas markets through joint ventures or strategic alliances.

Low Keng Huat’s Profit Surges 89.1% In 3Q12
Low Keng Huat, a construction and property development company, saw its profit surged 89.1 percent to $27.5 million in the third quarter ended 31 October. The improved profit was underpinned by better performances in its development and hotel segments that helped offset lower profit in its construction segment. While revenue rose 31.7 percent to $32.7 million, contributions from its associates and joint ventures grew significantly by $14.1 million to $19.7 million due to higher profit contributions from The Minton (fully sold in June). Over the nine-month period, revenue and profit increased 6.8 percent to $101.1 million and 26.2 percent to $67.6 million respectively.

Significance: While the high-end property segment is likely to remain sluggish, Low Keng Huat expects the mass market segment to remain resilient in view of the low interest rate environment. It thus remains cautiously optimistic and will continue to be selective in its project tendering.

Petra Food To Sell Cocoa Ingredients Division For US$950m
Petra Food, a manufacturer of cocoa ingredients and branded confectionary products, has proposed to sell its entire cocoa ingredients division for US$950 million. Specifically, the company inked a conditional sale and purchase agreement with Zurich-based Barry Callebaut AG. The sale will comprised of seven factories in Malaysia, Indonesia, Thailand, Brazil, Mexico, Germany and France as well as major sales offices in Singapore, Netherlands and USA. In conjunction with the divestment, a long-term supply agreement has been entered to purchase cocoa ingredients from Barry Callebaut to ensure minimal disruption to its branded consumer division.

Significance: Petra Food will realize a disposal gain of approximately US$106 million from the divestment. It intends to utilise the net sales proceeds to reduce all debt facilities, with the balance retain to finance future growth of its branded consumer division and possibly distributing part of the proceeds to its shareholders.