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Stocks In Focus (ISDN, SingTel, TEE Land, Yoma) – 28/06/13
ISDN Acquires Shareholding Interest In 3 Indo Companies
Aenergy Holdings, a subsidiary of ISDN Holdings, has signed a non-legally binding Memorandum of Understanding to acquire an 80 percent stake in three Indonesian energy-related firms – PT Charma Paluta Energy, PT Alabama Energy and PT Prisma Paluta Energy. The former has entered into a Power Purchase Agreement (PPA) with PT PLN (Persero) of North Sumatra, Indonesia’s state-run power distribution company, to build, own and operate a 4.6MW (Megawatt) mini hydro electric power plant at a tariff rate of US$0.08 per kilowatt hour for a tenure of 20 years. Construction of the proposed hydropower facility is expected to commence next year and last for 18 to 24 months. The other two firms are at the signing stage of a PPA with PT PLN to build, own and operate 9MW and 10MW mini hydro electric power plants in the same constituencies of North Sumatra. In an earlier announcement, ISDN had made known its target of 100MW by the end of FY14 through the development of hydropower projects. The three Sumatran mini hydropower plants, coupled with the previously unveiled plans to develop three power plants in Sulawesi, could provide a total of 42MW energy production capacity when fully realised.
Significance: Managing director and president of ISDN, Teo Cher Koon, said: “Our vision is to nurture the hydro power business into a significant growth catalyst for the Group and potentially transforming it into a business trust that yield steady returns.”
SingTel And Yoma Lose Out On Myanmar Telco Bid
Singapore Telecommunication (SingTel) and Yoma Strategic Holdings have been denied of two fiercely competed mobile licenses in Myanmar that the authorities awarded yesterday. Norwegian Telenor and Qatar’s Ooredoo edged out nine other bidders to win the licenses. In the event that negotiations between Myanmar and the recipients fall through, the country will look to a reserve list consisting of France’s Telecom-Orange and Japan’s Marubeni Corporation. Despite losing out on the licenses, analysts are of the view that with SingTel’s sizeable existing business, coupled with the low incomes in Myanmar, sales would not have made a significant impact on the firm’s bottom line in the short term. However, the potential impact for Yoma could have been greater, given the group’s relatively smaller size compared to SingTel. Presently, it is unclear how either firms would remain involved in Myanmar’s telecommunication industry.
Significance: SingTel was down $0.03 at 10am to $3.69 compared to its previous close on 27 June. Yoma was down $0.05 at 10am to $0.91 compared to its $0.96 closing price before a trading halt was requested on 26 June.
TEE Land Purchases Industrial Complex In Malaysia
TEE Land has entered into an Option to Purchase Agreement to acquire a 96,469 square feet freehold land with an existing building, worth RM40 million, in Bandar Petaling Jaya, Negeri Selangor, Malaysia. Presently zoned for “Industrial” use, the site has potential to be re-zoned for “Commercial” use and re-developed into a mixed development with a potential plot ratio of 1:4. The plot of land, located within the mature town of Petaling Jaya, is easily accessible and within short driving distance to PJ Hilton Hotel, several schools and medical centres. Petaling Jaya, part of a larger cosmopolitan area with close proximity to Kuala Lumpur, is one of the key centres of industrial and commercial activities in Malaysia. The proposed acquisition will be funded through the proceeds from its recent initial public offering and external bank borrowings. It is expected to be completed within six to eight months.
Significance: The agreement is in line with the TEE Land’s strategy to expand the firm’s regional presence. It is the group’s second foray into the Malaysian market, adding to the firm’s existing project at Cyberjaya, situated in the same state.
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