Company News

Nam Cheong has secured sale contracts for three vessels worth a total of US$41m, on the back of five vessel sales to PT BBR that was secured during the same month. This brings the total orders in Sep to eight which are collectively worth about US$126m. One 5,150 BHP AHTS vessel was sold to a Norway-based repeat customer, Vega Offshore Group. Orders for two 6,500 BHP AHTS vessels were also from repeat customers. With these contracts, Nam Cheong’s order book stands at about RM1.9b. We maintain our BUY rating with S$0.55 fair value estimate on the stock.

Following its trading halt announced on 23-Sep, ECS Holdings Limited (ECS) suspended its trading on 25-Sep. The reason for the trading halt was that the number of shares held in public hands as defined by SGX fell below 10% of the total number of issued shares of ECS and was pending response from the company’s controlling shareholder, VST Holdings Limited (VST), with regards to its intention on reinstatement of requisite public float. Last Friday, ECS further announced suspension of trading as VST, which held ~89.5% stake of ECS as at 22-Sep, indicated that it does not currently intend to undertake or support any action to restore the public float of the company. The suspension of trading in shares of ECS will remain until further notice. Pending more details from management, we put our BUY rating and S$0.68 fair value estimate under review.

OUE Limited: Investing US$200m in mutual fund OUE announced that it agreed to invest US$200.0m (S$254.2m) in Nuvest Real Return Fund, a Cayman Islands-domiciled exempted mutual fund. The Fund, launched in 2012 with seed capital from GIC, seeks to achieve stable annual returns above inflation through diversification across a range of investment classes and active management styles. Management sees this investment as part of its treasury operations and believes this will allow optimal returns on funds held in the current low interest rate environment through leveraging the expertise of the Fund. As at end 2Q14, we note that the group has significant net cash and equivalents of S$449.3m. Overall, we are neutral on this move and prefer management to return excess capital not earmarked for allocation into the group’s core businesses over the medium to long term. That said, taking into account the investment size and terms, this investment appears fairly liquid. Maintain BUY with an unchanged fair value estimate of S$2.69.

Ziwo Holdings proposed to acquire 25% stake in Xisheng (Quanzhou) Investment for RMB160m. The proposed investment in Xisheng is viewed as building a strategic inroad into the industrial reconstruction industry, which is underpinned by a rising need to rezone and redevelop new industrial zones in Quanzhou city in Fujian Province, China. Xisheng, jointly with CMTCC Shanghai Shisanye Construction, had successfully bid in 2011 to develop the Infrastructure Construction Project of Guanqiao Park in Quanzhou Economic and
Technological Development Zone, Quanzhou City, Fujian Province, China. Work has commenced on the Project, with phase 1 of the Project estimated to have a value of RMB 1.0bn.

Interra Resources Limited wishes to inform shareholders that its jointly controlled entity, Goldpetrol Joint Operating Company Inc., has commenced drilling development well CHK 1194 in the Chauk oil field in Myanmar. Interra has a 60% interest in the Improved Petroleum Recovery Contract of the Chauk field and also owns 60% of Goldpetrol which is the operator of the field. The results of the drilling and completion should be available in approximately six weeks. (Closing Price: S$0.27, -3.571%) CapitaCommercial Trust wishes to announce that CCT is exercising its option for the S$225.0 million 2.7 per cent. convertible bonds due in 2015 issued on 21 April 2010 and will redeem all of the outstanding Convertible Bonds on the redemption date 24 November 2014. The Conversion Price as at the date of this Announcement is $ 1.1926. (Closing Price: S$1.60, 0.629%)

CapitaCommercial Trust wishes to announce that CCT is exercising its option for the S$225.0 million 2.7 per cent. convertible bonds due in 2015 issued on 21 April 2010 and will redeem all of the outstanding Convertible Bonds on the redemption date 24 November 2014. The Conversion Price as at the date of this Announcement is $ 1.1926.