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Singapore stock market and companies daily report (CapitaMall Trust, Cogent Hldgs) (February 10, 2010)

Contributed by Shares Investment

By Shares Investment

CapitaMall Trust To Buy $268m Clarke Quay From CapitaMalls Asia
CapitaMall Trust (CMT) said yesterday it has agreed to buy Clarke Quay from parent company CapitaMalls Asia for $268m in cash, which in turn will boost the former’s asset size to $7.6b from $7.4b as at end-2009. ‘The acquisition of Clarke Quay complements CMT’s current portfolio of mainly suburban malls catering for necessity shopping,’ said Simon Ho, CEO of the trust’s manager. ‘It increases the number of properties that we have catering for discretionary consumer spending and will enable us to ride on the long-term remaking of Singapore as Asia’s leading convention, exhibition, leisure destination and services centre.’

Ho added that when the repositioning of Clarke Quay was completed in December 2006, it did not yet have an established track record of operations and some leases were committed below market rent. There is therefore potential for rental upside when leases become due for renewal in the next few years, he said. CMT said that based on its closing price of $1.73 on Feb 8, 2010, its distribution yield is 5.1% and the implied property yield is 4.9%. The transaction is expected to be yield-accretive given that the purchase price represents a 5.9% yield on Clarke Quay’s net property income of $15.8m in 2009. The trust added that it has sufficient financial flexibility and capacity to fund this transaction. Assuming the transaction is fully funded by debt, CMT’s gearing would be 33.1% – still within its target range of 30%-35%.

Logistics Firm To Launch IPO For Mainboard Listing
Homegrown full-suite logistics service provider Cogent Hldgs has announced its initial public offering (IPO) of 92m shares at $0.22 each for a listing on SGX Mainboard. Of the total 92m shares, 2m are available for public subscription while 90m are by way of placement. Cogent hopes to raise net proceeds of about $9.1m, of which $6.1m will be used to expand its container depot operations and warehousing space, $2m to expand its vehicle logistics operations and the remaining $1m for working capital requirements.

The company explained that its IPO was to facilitate its plans to expand overseas. ‘Our extensive experience in integrated logistics management, coupled with our strong relationships with multinational companies, will help to accelerate our expansion into countries such as Malaysia, Thailand, Vietnam and China,’ company chairman Tan Yeow Khoon said. He also hopes the IPO will raise Cogent’s local stature and increase recognition from banks. Cogent intends to recommend dividends of at least 50% and 20% of attributable profits for FY09 and FY10 respectively.

This article is contributed by Shares Investment. Visit Sharesinv.com for the latest Singapore, Malaysia and China stock market news and reports.