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Singapore stock market and companies daily report (Geo Energy Group, Kian Ann Engineering, K-REIT) (October 16, 2012)

Contributed by Shares Investment

Indonesia’s Geo Energy Targets IPO Launch This Friday
Indonesian coal mining company Geo Energy Group which is scheduled for a mainboard listing on the Singapore Exchange (SGX) is expected to start trading on Friday. It is offering 289.3 million shares at $0.325 per share comprising three million public-offer shares and the remaining 286.3 million placement shares. Robert Lim, managing director of Ellis Botsworth Advisory, which is advising Geo Energy on the IPO said: “The overall take-up for the shares among institutional investors has been healthy so far.” The group, which begun business operations in 2008, previously operated coal mining sites owned by third parties. However, following the enactment of a new Indonesian mining law at the end of 2009, it acquired its own mining concession and moved into providing mine contracting services such as overburden removal and coal hauling. It won its first contract in February 2012 and thus far has produced 445,000 tonnes of coal from its own concession. The firm estimates to produce 700,000 tonnes of coal for the full year and 2.3 million tonnes next year.
Significance: Geo Energy expects to raise about $77.8 million in net proceeds, which will mainly be used to finance its operations, expansion plans, as well as to build a jetty and barge loading facilities five kilometres from its concession. It also hopes to raise its profile among international buyers from this listing.

Kian Ann Receives Takeover Offer From Invicta
Mainboard-listed Kian Ann Engineering announced yesterday that an investment holding firm, Invicta Asian Holdings, has approached it and plans to purchase over all its shares and delist it from the SGX. Invicta Asian Holdings is indirectly wholly owned by Invicta Holdings, a distributor of capital equipment and engineering consumables in Southern Africa. CH Wiese, an industrialist based in South Africa, is the largest shareholder with over 35 percent stake in Invicta. Kian Ann is an excellent strategic fit for Invicta’s international expansion strategy and it intends to use it as a source hub in Asia and a platform for further expansion in the region, including Malaysia and Indonesia. The combined group can leverage on operations in Africa to create a more sizeable space parts group. Invicta intends to retain Kian Ann’s key management personnel and they will swap their respective interests in the company for a shareholding interest in Invicta Asian Holdings.
Significance: The proposed scheme of arrangement values Kian Ann at $192.8 million and involves Kian Ann shareholders transferring their shares to Invicta at $0.44 per share, which represents a premium of 7.3 percent over its last transacted price of $0.41 on 12 October 2012.

K-REIT Unveils New Name And DPU Up 85%
Office landlord K-REIT Asia yesterday unveiled a new name – Keppel REIT – along with its 3Q12 results, which saw distributable income surged 93.6 percent year on year to $51.7 million. The real estate investment trust’s manager, Keppel REIT Management, said the jump in distributable income for the quarter ended 30 September 2012 stemmed from higher net property income due to its acquisition of a further interest in Ocean Financial Centre (OFC). Keppel REIT bought a 12.4 percent holdings in Ocean Properties – the owner of OFC – lifting its interest in OFC to 99.9 percent. Its results were also aided by higher occupancy rates at two of its properties namely Prudential Tower in Singapore and 77 King Street in Sydney. The third quarter performance translates into a distribution per unit (DPU) of $0.0196 – up 84.9 percent from last year.
Significance: Keppel REIT remains confident of maintaining its performance as most of its assets are nearly fully committed with leases with long tenures. Approximately 45 percent of the portfolio lettable area is committed to leases which are five years and longer, and the long weighted average lease expiry of the top 10 tenants and portfolio stands at 7.2 years and 6.1 years respectively.