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Stocks In Focus SG (CapitaLand, Keppel Corp, LionGold) – 21/11/13
CapitaLand Completes Secondary Placement For AustraLand
Austvale Holdings and Ausprop Holdings, subsidiaries of CapitaLand, have sold 115.7 million securities of AustraLand Property Group to a range of institutional investors. The placement price, at A$3.685 per security, represents a 1.7 percent discount to the closing price of AustraLand’s security on 20 November 2013. As of 30 June 2013, AustraLand has a A$2.3 billion portfolio value spanning across 1.2 billion square metre of net lettable area in industrial and office properties based in Australia, including cities such as Sydney and Melbourne. The secondary placement expands AustraLand’s securityholder base and will potentially enhance the liquidity and free float of its securities. Upon completion of the placement, CapitaLand’s stake in AustraLand will be reduced from 59.1 percent to 39.1 percent and the latter will become an associated company of CapitaLand. AustraLand will remain as CapitaLand’s single largest key investment outside of its core markets in Singapore and China.
Significance: Proceeds of A$426.2 million (approximately $485.3 million) from the sale will be redeployed towards new opportunities in CapitaLand’s two core markets as well as general working capital purposes.
Keppel Wins US$265m Jackup Order From Ensco
Keppel Corporation, via Keppel FELS, a subsidiary of Keppel Offshore & Marine, has secured a contract to build a repeat KFELS Super A Class harsh environment jackup rig from a subsidiary of Ensco, a listed company in the US, for around US$265 million with an option to order another similar rig. The rig is based on the KFELS Super A Class, which is an enhancement of the proven KFELS MOD V-A Class jackup and features its proprietary jacking and fixation system that has a proven track record of operating in a variety of environments. In addition, the rig which is scheduled for delivery in 2Q16, also comes with enhanced operational safety features that meet the Health, Safety and Environment standards of various sectors in the North Sea. As at 30 September 2013, order books for Keppel Corporation stood at $13.6 billion.
Significance: The new rig order will be the fourth ENSCO 120 Series jackup rig that Ensco has ordered from Keppel FELS since 2011 and is believed to have a significant performance advantage in harsh environments around the world.
LionGold Secures Agreement To Procure Gold Trailings
LionGold Corp’s Owere Mines, owned by its subsidiary, Signature Metals, has entered into a heads of agreement (HOA) with B&C Gold where Owere Mines will procure and process gold bearing waste tailings as part of an environmental clean-up arrangement. In addition, the HOA also states that Owere Mines will purchase a minimum of one million dry metric tonnes of gold bearing tailings from B&C Gold over a three year period, renewable on an annual basis. A projection of 90,000 ounces of gold will be produced from the one million tonnes of tailings based on the assumption of an average gold grade of 3 grams/tonne and a recovery rate of 90 percent. Operations are expected to commence in March 2014. Consequently, Owere Mines will fully utilise its existing plant and equipment which currently has an annual processing capacity of 0.32 million tonnes of ore. The plant and equipment had been inactive since Owere Mines stopped trail mining activities and reverted to an aggressive exploration programme in March 2013.
Significance: Income from gold produced under the agreement is anticipated to sustain exploration activities at Owere Mine’s fully owned Konongo Gold Project to production. As of 30 September 2013, the Konongo Gold Project has identified a 200 meters extension of gold mineralisation at the Obenemase Deposit where the full extent of gold mineralisation is yet to be determined.
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