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Stocks In Focus (Healthway Medical Corp, Sembcorp Marine, Singapore Press Hldgs) – 28/05/13
Sembcorp Marine Secures US$596m Contract From Noble Corp
Jurong Shipyard, a subsidiary of Sembcorp Marine secured a US$596 million contract for a newbuild ultra-high specification jack-up rig from Noble Corporation. Noble Corporation, an oil and gas company, has six F&G JU3000N class jack-up rigs worth a total of US$1.3 billion currently under construction at Jurong Shipyard in addition to this order. Adding on, it still has an option for an additional unit for use in the United Kingdom sector of the North Sea while two units of rigs were delivered to Noble in 2009 and 2010 respectively. Commenting on the contract, William Gu, general manager of Jurong Shipyard’s Offshore Division said that they are very honoured to be chosen by Noble as the partner for this newbuild ultra-high specification jack-up rig and thanked Noble for their trust and confidence in their rig building capabilities.
Significance: The US$596 million contract from Noble Corp is an addition to the strong order book of Sembcorp Marine standing at $13.6 billion with completion and deliveries stretching till 2019. The company opened higher at $4.45 this morning compared to the previous closing of $4.41.
Healthway Medical To Raise $10m For Expansion In China
Private healthcare provider Healthway Medical Corporation intends to raise $10 million via a placement of up to 97.5 million new shares issued at $0.01026 apiece. The issue represents 4.41 percent of the company’s existing issued share capital of 2.2 billion shares as at 27 May, and 4.22 percent of the enlarged share capital. The placement shares are priced at a discount of approximately 9.92 percent of the weighted average price of $0.1139 per share, based on trades done on the on 22 May. After deducting estimated expenses, half of net proceeds of $9.7 million will be channelled towards the firm’s plans to expand in China while the balance will be used to finance obligations in Healthway Medical Development, an associate company that is eyeing a listing under the name of International Healthway Corporation.
Significance: While the new funds would support Healthway Medical’s strategy of building its presence in China progressively to achieve its goal to become a prominent provider of healthcare services in the country, news of new share issue was not well-received as shares of the company opened today’s session 3.5 percent or $0.004 lower at $0.111.
SPH Proposes Retail REIT-Listing With Potential Net Proceeds Of $1b
Singapore Press Holdings (SPH) proposed a REIT listing for two of its properties, Paragon and The Clementi Mall. SPH will be selling both properties to the REIT at $3.07 billion. Based on figures from FY2012, the listing will increase SPH’s NAV from $1.39 per share to $2.27 per share. With the offering, SPH’s net gearing ratio will reduce substantially from 40.6 percent to 9.3 percent as the properties represent a large portion of SPH’s net borrowings. Mr Alan Chan, chief executive officer of SPH said: “Through this transaction, SPH shareholders will be able to enjoy the best of both worlds – a special dividend and the opportunity to continue to enjoy the benefits from the establishment of SPH REIT in which the group will continue to be closely involved.” Upon completion of the listing, SPH will retain approximately 70 percent of the units in the REIT.
Significance: By unlocking the value of its properties, SPH will gain capital to pursue its growth plans across its property, media and other businesses. A REIT listing allows SPH to partake in a recurring fee income, adding a valuable fee-based management business to the Group’s portfolio. A special dividend of $0.18 per share will be paid out to shareholders upon completion of the offering.
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