Keppel Land ($3.46, up 6 cents) wishes to announce that its whollyowned subsidiary, PT Keppel Land (“PT KL”), has entered into a share sale agreement with Silverise Enterprise Limited (“SEL”) and its related corporation, PT Pelangi Arjuna (“Pelangi”), as joint and several purchasers (SEL and Pelangi, collectively the “Purchasers”), for the sale by PT KL to the purchasers of its entire interest in PT SSP, constituting 80% of the paid up share capital of PT SSP.
The remaining 812,700 fully paid shares in PT SSP (constituting 20% of the paid up share capital of PT SSP) are currently held by SEL. PT SSP developed BG Junction – a strata-titled six-storey retail mall with an adjoining multi-storey car park building in Surabaya, Indonesia – and currently owns approximately 90% of BG Junction.
The total consideration payable by the purchasers to PT KL for the PT SSP Sale Shares is the sum of (i) IDR 400 billion (approximately S$42.80 million), and
(ii) 80% of the relevant adjustment amount which shall be
(a) based on the difference between the current asset value and the current liabilities set out in PT SSP’s unaudited fi nancial fi gures and
(b) determined solely by PT KL fi ve business days prior to completion of the sale and purchase of the PT SSP Sale Shares.
The date of Completion shall be no later than 31 January 2015. As at the date of the SSA, a sum of IDR 40 billion (approximately S$4.28 million) has been paid by the Purchasers to PT KL.
he balance of the Sale Consideration is payable by the Purchasers to PT KL as follows:
(a) IDR 60 billion (approximately S$6.42 million) by the end of November 2014; and
(b) the sum of IDR 300 billion (approximately S$32.10 million) and the Adjustment Amount on the completion date. Keppel Land expects to realise a net gain of approximately S$12.50 million from the transaction (based on a sale consideration of IDR 400 billion (approximately S$42.80 million).
With the sale of Equity Plaza and the 1/3 stake in Marina Bay Financial Centre Tower 3 reaping Keppel Land S$155mln in profi t, and another S$12.5mln from the latest disposal of PT SSP, we believe minority shareholders can look forward to a bumper special dividend at the end of this year on top of their usual dividend of 13 cents /share.
We estimate the special dividend to be close to 4 cents a share, lifting their yield close to the 5% level, which is above its peer group average’s 2-3% range.
Total incoming proceeds from the asset sales of close to $900mln would bring its gearing down from 45% to a manageable 30%. Maintain BUY.
Far East Hospitality Trust ($0.815, down 0.5 cent) has entered into a joint venture agreement with Far East Organization Centre (a member of Far East Organization) to participate in the development of a new $443.8 mln hotel project located on Sentosa that is expected to be completed in 2018.This is Far East H-Trust’s fi rst investment in Sentosa and the Trust will hold a 30.0% stake, which will be fully funded by debt. Notably, this is Far East H-Trust’s second investment since its listing in Aug 2012. Based on last closing price, the REIT currently offers about 6.5% prospective yield.
United Engineers ($2.87, up 10 cents), through a 20:80 consortium between its wholly-owned environmental engineering subsidiary UE NEWater Pte Ltd and BEWG International Pte Ltd (BEWGI) respectively, was selected as the preferred bidder to design, build, own and operate the second NEWater plant at Changi. The project will have a daily production capacity of 228,000 m3 and is expected to be completed in late 2016. It will purify treated used water from Changi Water Reclamation Plant into ultra-clean, high-grade reclaimed water known as NEWater.
The second NEWater plant at Changi will be constructed on the rooftop of the existing Changi Water Reclamation Plant, and the main processes that will be adopted are microfi ltration and reverse osmosis followed by ultraviolet disinfection. The group is also working on two projects in Changi Water Reclamation Plant – a proposed membrane plant project which is targeted to complete in 2015 as well as the proposed expansion to digesters and effl uent pumping station project which is targeted to complete in 2014.
RH Petrogas Ltd ($0.805, up 0.5 cent) said that based on the update from the controlling shareholders of the Company, namely Surreyville Pte Ltd, Sharptone Investments Ltd and RH Capital Ltd, there has been no further discussions or progress regarding the matter between the parties since its previous announcement on 20 May 2014. Although the potential investor has previously expressed interest in investing in the company, the controlling shareholders have to-date still not received any offer nor indication of terms thereof from the potential investor. In view of the above, there is no certainty that the parties will engage in any further discussions which will result in any defi nitive agreement or transaction.
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