Singapore stock preview: CapitaLand, Keppel, FCT
These are the SGX-ST mainboard stocks to note for the week of 22 March 2021.
- CapitaLand Ltd (SGX: C31) request for a trading halt on Monday morning, prior to the group announcing plans to restructure its business and list a new real estate investment manager on the SGX
- Keppel Corp (SGX: BN4) said that a previously announced consensual transaction of its associate Floatel will now take place without the need of a new company
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1. CapitaLand (SGX: C31)
Property group CapitaLand, together with CLA Real Estate Holdings, announced on Monday morning (22 March 2021) that it is planning to restructure its business and establish a new real estate investment manager (REIM).
The group is seeking to consolidate its investment management platforms, as well as its lodging business, into CapitaLand Investment Management (CLIM), as part of the proposed restructuring.
CapitaLand hopes to ‘sharpen its business focus’ and ‘unlock substantial value’ for shareholders through this exercise.
The newly created REIM is to be listed by introduction on the Singapore Exchange (SGX). It will also place the real estate development business of the group under private ownership, to be fully held by CLA through the proposed privatisation of CapitaLand on completion of the scheme.
CapitaLand will distribute approximately 48% of CLIM shares to all shareholders in a one-for-one distribution scheme, excluding CLA’s eligible shareholders.
Eligible shareholders are expected to receive S$4.102 per share in cash and scrip for every one CapitaLand share they own. This is 24% above the last traded price of CapitaLand and represents a premium of 27% to the one-month volume-weighted average price.
The cash consideration will not be reduced by the amount of the FY2020 final dividend after payment is made.
CapitaLand will continue to own a 52% interest upon listing of CLIM.
CapitaLand requested for a trading halt before the market opened on Monday. Shares closed at S$3.31 on Friday (19 March).
2. Keppel Corporation (SGX: BN4)
Keppel has announced that a consensual transaction for the restructuring of its associate company Floatel has been agreed between Floatel and FELS Offshore Pte Ltd.
The consensual transaction is substantially similar to the transaction described in the company’s announcement on 05 December 2020, except that the transaction will take place at Floatel itself, without the involvement of a new company or new company acquisition.
As part of the agreement, all subsidiaries of Floatel prior to the completion of the consensual transaction will remain owned by Floatel.
Next, FELS will retain its common shares in Floatel representing 49.92% of the total issued share capital of Floatel. A subordinated loan borrowed by Floatel from FELS in the amount of approximately US$244 million will also be forgiven.
Finally, Floatel has taken on a new super senior revolving credit facility with a principal amount of up to US$100 million. The purpose of the credit facility is, among other things, to fund a cash redemption of new 1L bonds, and for Floatel group’s working capital and general corporate purposes.
The consensual transaction is expected to be completed on 24 March 2021.
Keppel shares are up 2.14% to S$5.27 each as at 11:59 SGT on Monday (22 March).
3. Frasers Centrepoint Trust (SGX: J69U)
Frasers Centrepoint Asset Management Ltd., the manager of Frasers Centrepoint Trust (FCT), announced that its appointed trustee has entered into a sale and purchase agreement with an unrelated third party, for the proposed divestment of FCT’s ownership in YewTee Point for a consideration of S$220 million.
The consideration was negotiated on a willing-buyer-willing-seller basis. The valuation of the property based on an independent valuation is S$200 million as at 31 January 2021.
The estimated net proceeds from the divestment is approximately S$219.9 million, after accounting for the divestment fee and other divestment related expenses.
The divestment is in line with the manager’s proactive portfolio management strategy to optimise FCT’s portfolio composition and returns objectives for FCT and its unitholders.
The manager intends to use the net sale proceeds to repay debt which will lower FCT’s gearing level. The divestment is expected to complete on 28 May 2021.
FCT shares are trading at S$2.54 as at 11:59 SGT on Monday.
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