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Stocks In Focus SG (Rex International Holdings, Courts Asia, Forterra Trust) – 23/07/13
Rex To Raise $85.3m From Catalist IPO
Rex International Holdings, an exploration and production player, launched its initial public offering (IPO) on 22 July 2013 with a public offer of 2.5 million shares at $0.50 per share. Including over-allotment, the company expects to place out 168 million shares and raise proceeds up to $85.3 million. Debt free barring for a $2.4 million loan from a controlling shareholder, Rex will use most of the net IPO proceeds for active drilling programmes in the Middle East and Norway, as well as direct investments in new oil and gas opportunities and general working capital. Rex’s business is modeled to reduce its exposure to the expensive and time-consuming costs spanning from the acquisition of licences to exploration and development of oil wells. The Swedish oil and gas group essentially partakes in ventures with already secured exploration and production licences through utilisation of its leading-edge technology in exchange for an equity stake.
Significance: Rex plans to drill two offshore wells in its Oman concession later this year and the first well in each of its other two offshore concessions in the Middle East next year. Its recently started 80-well onshore drilling in the US, while in Norway it will drill three to five new offshore exploration wells as well as grow its licence portfolio. First oil production for its US assets in North Dakota is expected in 4Q13.
Courts Asia To Build Two Megastore In Indonesia
Courts Asia has signed a memorandum of understanding (MOU) with Indonesia conglomerate, Sinar Mas Land, to build two “big-box” stores in Indonesia with build-to-suit concept. The two megastores will be located at Bekasi, located east of Jakarta, and Sinar Mas Land’s major project, BSD City, which is located southwest of Jakarta. The two big-box stores have a lease for a period of 28 and 30 years respectively. The Bekasi site is expected to be ready 12 months from the date of appointment of contractor, within 2014. Followed by the BSD City site six months after the completion of Bekasi megastore. The MOU will lay down the framework for the group to partner with Sinar Mas Land to build additional stores in the future on the same terms, when suitable sites are identified. “This build and leaseback arrangement that we have with Sinar Mas Land is very much in line with our asset-light approach, allowing us to focus on our core expertise in retail and credit operations,” cited Courts Asia’s executive director and group chief executive officer, Terence Donald O’Connor.
Significance: Courts Asia had previously highlighted Indonesia as a market well-suited for its big-box strategy and a key growth driver for the group in the next few years. In addition, the two big-box megastores in Indonesia will increase Courts Asia’s existing retail store presence by 20 percent when they open.
Forterra Trust Gets New Largest Unitholder
Richard Barrett, a director of Forterra Real Estate (FRE), beneficial owner of Oriental Management Services (OMS) has entered into a conditional agreement with subsidiaries of Nan Fung, involving the sale of 30 percent of Forterra Trust and 100 percent of OMS. Nan Fung will buy from Richard Barrett, Rory Williams and John Ronan, representing a 26.9 percent stake for $203.4 million. Followed by a put-and-call option agreement, for the sale of an equivalent amount of shares to 3.1 percent of Forterra Trust to Nan Fung, for $23.3 million. Richard Barrett, being the beneficial owner of OMS, will sell the entire ownership to Nan Fung for EUR17.5 million ($23 million). The completion of all the agreements will make Nan Fung the single largest unitholder in Forterra Trust.
Significance: The development marks a closure to the saga that stemmed from the sale of FRE and Treausry Holdings – trustee-manager and property manager of Forterra Trust – to OMS in 2012. The Trust share price skyrocketed yesterday at the arrival of the news by 57 cents, a 35 percent increase, to close at $2.20.
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