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Singapore stock market and companies daily report (United Overseas Bank, Wilmar, CapitaMalls Asia) (July 06, 2010)

Contributed by Shares Investment

By Shares Investment

UOB Subscribes US$100m Of AgBank’s IPO

United Overseas Bank has agreed to subscribe for shares worth US$100m in Agricultural Bank of China’s (AgBank) global share offering. AgBank is offering 25.4b H-shares in Hong Kong at between HK$2.88 and HK$3.48 apiece and 22.2b A-shares in Shanghai at between Rmb2.52 and Rmb2.68 each in a dual listing. Temasek had earlier agreed to subscribe for US$200m of shares. Other heavyweight investors include Standard Chartered Bank, the sovereign wealth funds of Qatar and Kuwait, and Cheung Kong Holdings. AgBank’s H-shares are expected to commence trading on 16 Jul-10, a day after its A-shares are slated to debut in Shanghai.

Significance: Although AgBank’s focus is on serving the poorer parts of China at the cost of lower profitability and a higher bad-loan ratio than its rivals, UOB’s subscription provides UOB the opportunity to participate in the growth potential of the AgBank and China’s economic growth.

Wilmar Acquires Aussie Sugar Giant For A$1.75b

Wilmar has bought Australia’s largest raw sugar producer Sucrogen, for A$1.75b ($2.04b). Sucrogen, a unit of Australia’s CSR, is also the largest sugar refiner in Australia and New Zealand, the second-largest Australian producer of fuel bio-ethanol and the largest supplier of industrial ethanol to the Australian market. The sale price comprises A$1.347b in equity value and about $400m of Sucrogen’s debt. The deal prices Sucrogen at 22 times earnings and between 2 and 3 times book value, and will be funded internally and through bank borrowings. Wilmar said the acquisition could lift its pro-forma earnings per share to US$0.279 from US$0.274 in 2009. Pro-forma net tangible assets would fall to US$0.98 from US$1.08. Meanwhile, Wilmar is also expected to invest about US$400m in the sugar milling and cane plantation business in Indonesia and is in the process of conducting feasibility studies.

Significance: Sucrogen, Australia’s premier sugar company, will revive Wilmar’s strategy to expand into the sugar business whereby demand for sugar is expected to increase substantially in the future due to rising affluence and a corresponding increase in consumption in the emerging economies of Asia.

CMA Acquires Metro’s Gurney Plaza Extension For $92.9m

CapitaMalls Asia (CMA) is buying Metro Holdings’ (Metro) interest in Gurney Plaza Extension in Penang for $91.5m after Metro exercised a put option. Under the terms of the deal, CMA is required to complete the acquisition by 15 Apr-11. Separately, CMA will be granting CapitaMalls Malaysia Trust (CMMT) a right of first refusal to acquire Gurney Plaza Extension after the finalisation of the acquisition. CMMT is still in the midst of its RM848m IPO and is likely to make a decision only after its listing on the securities exchange of Malaysia. Meanwhile, according to Metro, the net proceeds of the divestment will be added to the working capital of the group and used to build on the group’s presence and investment in the region.

Significance: The addition of Gurney Plaza Extension which has an occupancy rate of some 98.7%, to CMMT provides CMMT the stable flow of rental income and may further strengthen CMMT’s portfolio.

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