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Stocks In Focus SG (AACI REIT, Biosensors Int’l, China Fishery) – 25/11/13
AACI REIT To Acquire A$184.4m Australian Property
AIMS AMP Capital Industrial Real Estate Investment Trust (AACI REIT) has proposed to acquire a 49 percent indirect interest in Optus Centre for A$184.4 million (approximately $215 million). The property, a premium business park located at Macquarie Park in Sydney’s northern region, is completely leased to Optus Administration, a subsidiary of Singtel Optus, for a weighted average lease term of 8.6 years with fixed annual escalation of 3 percent. The deal, with the help of AACI REIT’s two sponsors, AIMS Financial Group and AMP Capital, would mark AACI REIT’s first acquisition in Australia. The weighted average lease expiry of the trust will increase to four years from three years as at 30 September 2013 on a pro forma basis when the acquisition is completed. Sixty percent (A$110.7 million) of the purchase price will be funded by a new five year Australian dollar term loan facility and the remaining (A$73.7 million) will be funded by an existing dual currency credit facility.
Significance: For 1H13, on a pro forma basis, net property income yield will increase to 6.6 percent from 6.3 percent. Subsequently, distribution per unit and distribution yield is expected to increase to $0.0541 from $0.0512 and 7.1 percent from 6.8 percent respectively.
Substantial Shareholder To Dispose US$312.3m Worth Of Shares In Biosensors
Biosensors International’s substantial shareholder, Shandong Weigao Group Medical Polymer (Weigao), via its subsidiary, Wellford Capital, has agreed to divest shares in Biosensors for a consideration of US$312.3 million (Rmb1.9 billion). The purchaser, CB Medical Holdings, is an investment holding company incorporated in Bermuda and will finance the deal with cash. As of 21 November 2013, the sale represents approximately 21.7 percent of the total issued share capital of Biosensors (excluding the treasury shares in issue). The consideration translates to a purchase price of $1.05 per share and represents a premium of approximately 11.7 percent to the closing price of $0.94 per share of Biosensors on 21 November 2013. From the sale, Weigao is estimated to realise a loss on total comprehensive income of approximately Rmb449 million between the consideration and net book value of interest in Biosensors (Rmb2.4 billion) as at 30 September 2013. The completion of the disposal shall take place on 20 December 2013.
Signifiance: As the business environment in the PRC is becoming increasingly competitive and continues to evolve and pose new challenges, Weigao sees the disposal of shares in Biosensors as an opportunity to re-calibrate its focus on its three primary business activities.
China Fishery Bottom Line Up 7.3%
In China Fishery Group’s latest fiscal year ended 28 September 2013, the firm’s turnover fell 8.1 percent to US$555 million. Revenue from its Peruvian fishmeal operations decreased as a result of a significant reduction in Total Allowable Catch (TAC) in the 2012 second fishing season in the Peruvian Anchovy fishery, partially offset by higher selling prices of fishmeal/fish oil. Income from the firm’s contract supply business, the primary revenue contributor of China Fishery, dipped from US$375 million a year earlier to US$361.4 million, mainly attributable to lower average prices of various products. China Fishery’s newly-established fishing operations in Namibia successfully commenced its activities in FY13 and contributed positively to the performance of the China Fishery Fleet operations. Despite the lower turnover, an income tax benefit of US$6.6 million, driven by a reversal in tax expenses in China Fishery’s Peruvian Fishmeal segment, bolstered earnings up 7.3 percent to US$83.8 million.
Significance: With its acquisitions in Peru over the past few years, China Fishery’s fishmeal and fish oil business is well-positioned to capitalise on the expected growth in the TAC of Peruvian Anchovy and rising demand for fish globally.
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