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Stocks In Focus (Ascott Residence Trust, Vard Hldgs, Keppel Corp) – 02/05/13
Ascott Buys Assets In China & Japan Totalling $287.4m
Ascott Residence Trust entered into conditional agreements to buy three primed serviced residences in China and a portfolio of 11 rental housing properties in Japan for a total of $287.4 million. Ascott will buy Citadines Biyun Shanghai and Somerset Heping Shenyang for Rmb321 million (approximately $63.2 million) and Rmb438 million (approximately $86.2 million) respectively from Ascott Serviced Residence (China) Fund, in which The Ascott Limited holds a 36.1 percent stake. It will also buy Citadines Xinghai Suzhou from The Ascott for Rmb118 million (about $23.2 million). In Japan, it will buy 11 rental housing properties in Japan for 9.2 billion yen (about $114.8 million) from ACRJ3, an 88.9 percent owned subsidiary of Ascott. The new additions will add 1,576 apartment units to Ascott’s current 7,060 apartment units. Ascott’s asset size will also increase by 11 percent from $2.8 billion to $3.1 billion.
Significance: Ascott said the acquisitions are expected to increase FY12 distribution per unit by 2.9 percent from 8.76 cents to 9.01 cents. The acquisition of quality assets in China and Japan will also increase its Asia portfolio, where it remains a hotspot for the trust to grow, from 59 percent to 63 percent of its total asset value.
Vard Secures Contract With Norwegian Buksér og Berging
One of the major global designers and shipbuilders of offshore and specialised vessels, Vard Holdings, has entered into a contract with Buksér og Berging for the construction of one Azimuth Stern Drive (ASD) offshore tug vessel. The vessel is scheduled for delivery in the first quarter of 2015 from Vard Braila in Romania and will have a length of 42.5 meters with a beam of 15 meters and a bollard pull of approximately 115 tons. Roy Reite, chief executive officer and executive director of Vard, was pleased to welcome Vard’s new customer, Buksér og Berging, which is a market leader in providing specialised towage vessels for the marine, oil and gas industries. Just a couple of weeks ago, Vard signed the letter of intent for one platform supply vessel with Simon Møkster Shipping. Previously known as STX OSV, Vard’s adoption of a new name follows the sale of STX Europe’s majority stake in STX OSV to Italy’s Fincantieri Oil & Gas S.p.A in 23 January 2013.
Significance: Winning these shipbuilding contracts is testimony to Vard’s track record and strong experience in its long history in shipbuilding. Nonetheless, the shipping and shipbuilding markets’ outlook in 2013 remain cautious due to financing and overcapacity related issues.
KepCorp Reorganises Infrastructure Division
Keppel Corporation (KepCorp) announced the reorganisation of both Keppel Energy (KE) and Keppel Integrated Engineering (KIE) under a new entity, Keppel Infrastructure Holdings, with effect from 2 May. Keppel Infrastructure will be headed by Ong Tiong Guan, the managing director of KE and the deputy chairman of KIE. The incorporation of the new entity will enable the group to consolidate resources to invest in, own and operate competitive energy and infrastructure solutions and services. KepCorp noted that Keppel Infrastructure will have three main businesses: to grow its existing power and gas business; develop and operate waste-to-energy facilities, as well as provide technology solutions and seek out opportunities in the energy value chain to meet the growing need for competitive energy.
Significance: The reorganisation will spur efficiencies, streamline operations and build sustainable and scalable businesses in the infrastructure division. It will also be able to tap the expertise and technology of its engineering business, while growing its power and gas, environmental and energy efficiency businesses.
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