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Stocks In Focus SG (Cordlife , Interra Resources, GLP) – 04/09/13
Cordlife To Acquire 19.9% Stake In Malaysia-Listed Stemlife For RM29.6m
Cordlife announced that it has entered into a conditional sale and purchase agreement with two vendors to acquire a 19.9 percent equity interest in StemLife, a company listed on Bursa Malaysia; for an aggregate consideration of RM29.6 million. The aggregate consideration for the acquisition will be satisfied via the issuance of eight million new ordinary shares in Cordlife at an issue price of $1.30 per share and cash payment of RM2.9 million. The aggregate consideration was arrived after negotiation on an arm’s length basis and on a willing-buyer willing-seller basis taking into account the aggregate net tangible asset value of StemLife of approximately RM33.8 million, cash balance of RM72.8 million and deferred income from operations of RM57.1 million, as at 30 June 2013.
Significance: The proposed acquisition is in line with the Cordlife’s strategy to enlarge its geographical footprint in Asia and extend the group’s reach of complementary services such as umbilical cord tissue banking.
Interra Resources To Acquire Indonesian Firm PT Benakat Barat Petroleum
Interra Resources announced that its wholly-owned subsidiary, Goldwater Indonesia (GI), has entered into a sale and purchase agreement (SPA) to acquire equity interests in PT Benakat Barat Petroleum (BBP) with a consideration payable by the company for the shares at US$78.5 million. BBP is 94 percent owned by PT Indelberg Indonesia (II) and 5 percent owned by PT Bintang Sukses Nasional. The transaction will be 80 percent paid for with cash, financed through bank borrowings, the remaining 20 percent will be funded by new shares issued at $0.46. The completion of the proposed acquisition is expected to be within nine months after the date of execution of the SPA, 2 June 2014, which will bring the target group under the control of GI.
Significance: The proposed acquisition of BBP will increase Interra Resources’ existing reserves by 80 percent and enhance its current production of oil significantly. In the reserve report of the Benakat Barat field dated May 2010, the “proven plus probable” 2P reserves were stated as 19.9 million barrels.
GLP To Offload 2 Properties To GLP J-REIT
Global Logistic Properties (GLP), a leading provider of modern logistics facilities in China, Japan and Brazil has announced its decision to sell two properties to GLP J-REIT, for ¥28.5 billion (US$287 million). This sale represents a 1 percent premium to the appraised value of ¥28.2 billion as of 30 June 2013. The properties are located in Greater Tokyo and Nagoya having a total gross floor area of 126,000 square meters. Apart from the first deal, GLP Japan Income Partners I (33.3 percent owned by GLP) has also decided to sell seven properties to J-REIT for approximately ¥27.5 billion pushing the total amount of acquisitions by J-REIT to nine properties. The deal is expected to be completed in October 2013. Net cash proceeds from both deals are estimated to be approximately ¥22.6 billion (US$228 million) whereby GLP plans to reinvest the proceeds to maintain its 15 percent stake in J-REIT together with other developments in China, Japan and Brazil.
Significance: Both deals are in line with GLP’s approach to recycle capital and to maintain its current interest in the fund management platform. Following this transaction, GLP’s fund management platform will increase to US$8.4 billion.
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