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Stocks In Focus (ISDN, Ryobi Kiso, Singapore Airlines) – 21/06/13
ISDN Proposes Rights Issue Of Warrants
ISDN Holdings (ISDN) plans to raise up to $111.6 million from the issue and exercise of warrants. The subscription of the warrants, at $0.02 each, on the basis of one warrant for every two existing ordinary shares held, shall provide $3.6 million. The remaining $108 million assumes the full conversion of the warrants into shares, with each warrant carrying the right to subscribe for one share at an exercise price of $0.60. The issue price and exercise price, together, represent a 55.6 percent discount from the closing price of $1.35 per share on SGX on 17 June-13. The net proceeds will be used for working capital purposes for the energy-related business of the firm, as well as to fund energy-related acquisitions by ISDN. In a vote of confidence, the undertaking shareholder, Assetraise Holdings, which holds approximately 35.5 percent stake in ISDN, will fully subscribe its allotted number of warrants under the rights issue and apply for all excess warrants.
Significance: The proceeds from the rights issue will help fuel ISDN’s diversification strategy including proposed ventures into the businesses of developing and operating a coal mine and the production of coal in Indonesia, constructing, operating and maintaining hydropower plants in Myanmar as well as signing a Memorandum of Understanding with IDI Infrastructure to explore opportunities to develop and invest into energy projects and expand international power producer businesses in Asia.
Ryobi Adds $37.3m To Order Book
Ryobi Kiso Holdings (Ryobi), a specialist ground engineering solutions provider, announced that it had secured additional new contracts worth $37.3 million. The additional contracts will bring the year-to-date contract value to $55.4 million. The new contracts would involve Ryobi in providing foundation and geoservices works in 11 projects with five of the projects located in Western Australia while six others will be located here in Singapore. Commenting on this recent addition to the group’s order book, Ong Tiong Siew, chief executive officer and executive director of Ryobi said while Ryobi continues to secure contracts in Singapore, they are also making good progress in Australia as evidenced by these newly-added contracts.
Significance: The additional contracts in Australia, which will add to Ryobi’s order book of $86.9 million as of 31 March-13, shows progress in the firm’s strategy of regionalisation.
SIA Receives FIRB’s Permission To Raise Stake In Virgin Australia
Singapore Airlines (SIA) has been given the green light by Australia’s Foreign Investment Review Board (FIRB) to proceed with its plans to increase its stake in Virgin Australia to 19.9 percent from 10 percent. The approval will allow SIA to acquire an additional 255.5 million shares, at A$0.48 each, in Virgin Australia, for A$122.6 million. The additional shares will be purchased from the Virgin Group. The transaction is expected to be completed by the end of next week. In late 2012, SIA bought an initial 10 percent stake of Virgin Australia through an injection of capital in Virgin Australia Holdings. In addition, SIA has placed a firm order for 30 Airbus A350-900 aircraft worth US$8.6 billion, with options for 20 more. Under the terms of the deal, SIA could convert the options into the larger A350-1000s. Presently, the airline has 70 firm orders for the A350-900.
Significance: SIA said it believed there is potential to boost flights or use bigger aircraft on Australia routes, thanks to its alliance partner feeding more passengers on to its network.
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