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Stocks In Focus SG (Koh Brothers Group, Albedo, SingTel) – 09/10/13
Koh Brothers Sets Up First Precast Plant In Iskandar
Koh Brothers Group announced that its wholly-owned building materials unit, G&W Group has kick-started operations at its first precast plant in Senai, within Iskandar, Malaysia. The unit invested $13 million for 47,000 square metres (sqm) of freehold land for the precast plant, which is expected to boost G&W Group’s precast plants to 96,000 sqm in land size, and total precast concrete capacity to approximately 150,000 cubic metres per annum. The plant, equipped with six production lines served by 12 gantry cranes, will manufacture a full range of precast components for residential and industrial buildings and infrastructural use. Furthermore, its strategic location which is close to the company’s headquarters in Singapore, ensures highly efficient supply-chain management as well as greater cost efficiencies.
Significance: The establishment of Koh Brothers’ new plant is timely, in view of Singapore’s government’s intention to ramp up housing supply as well as to ride on the development of Iskandar Malaysia, where demand for high quality precast components is also growing.
Infinite Rewards Stresses Commitment To Albedo’s RTO
Infinite Rewards, which controls Reflections Oasis, the company that Albedo is trying to acquire in a reverse takeover (RTO) deal to transform itself into a property play, emphasised its commitment on seeing this deal go through. Albedo is trying to buy Reflections Oasis, which holds seven land parcels in Gelang Patah in Johor, for $774 million, via the issuance of 34.6 billion shares. Many well-known names have been roped in for the RTO as a signal of intent. PrimePartners Corporate Finance, Morgan Stanley Asia (Singapore), Deloitte & Touche and Lee & Lee are among those that have been or will be appointed. Executive director for corporate finance of Infinite Rewards, Leong Choon Meng, mentioned that if Infinite Rewards is not serious about it, this kind of money will not be spent.
Significance: The entire development of all seven parcels will take up to 15 years, which stems the significance of the commitment between both parties. If all goes well, the first parcel will get its development order in January, and the RTO is expected to complete in March after a shareholders’ meeting.
SingTel’s Optus Inks A$60m Deal With Virgin Australia
SingTel’s Optus Business has inked a new A$60 million agreement with airline Virgin Australia to deliver domestic and international telecommunication services over five years. The services will be delivered over Optus’ managed data network which has the resilience and scalability required to meet Virgin Australia’s critical quality assurance standards. The appointment by Virgin Australia was after fulfilling the evaluation of a wide range of criteria including partnering approach and regional delivery capability. Just last month, Optus also signed a deal of A$530 million with the Australian and New Zealand Banking Group (ANZ), which will see Optus providing the banking group with telecommunications and managed services for another five years.
Significance: This win, coupled with the win from ANZ last month is further proof of Optus’ recent restructure to bring together all its people, assets and capabilities into one organisation. The consolidated effects of these contract wins could very well be seen to have some positive impact on SingTel’s consolidated books upon realisation.
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