Month: September 2007

Rickmers – SSB

RICKMERS, ssb remains a BUY with target price $2

– 4 vessels acquired for US$276m: Rickmers announced MOU to acquire 4x 4,250TEU container vessels for a total of US$276m from Polaris Shipmanagement pursuant to the right of first offer granted to them. The vessels are among the 9x 4,250TEU vessels Rickmers disclosed in their IPO prospectus for having right of first offer. The vessels will be paid for upon delivery which is scheduled between Feb and Dec 2009.

– 7-year time charter to Hanjin: Each vessel comes with 7-year fixed rate time charter to Hanjin Shipping (000700.KS) at a rate of US$25,950 per day with an option for an additional 3 years at US27,950 per day. CFO of RTM commented that each vessel is expected to contribute approximately US$9m in revenue and US$7m in EBIT per annum.

– What to expect : This is the type of acquisition we believe investors will continue to look for. Along with the recent MOU for 4x 13,100TEU vessels with Maersk, the current addition will raise total contracted fleet capacity by 170% from 40,910TEU to 110,310TEU. We expect further MOUs on additional vessel acquisitions to be announced in coming months.

– Buy for yield and growth: Reiterate our S$2.0 target price based on 7% yield and 5% distribution growth by year two and based on acquiring 10 accretive vessels on long-term charters.

tfwee September 13, 2007 Rickmers No Comments »

Cambridge – Daiwa

CAMBRIDGE, Daiwa remains OUTPERFORM with target price $1.06 (from $0.98)

– We maintain our 2 (Outperform) rating for Cambridge Industrial Trust (Cambridge) ahead of its S$193.9m equity fund-raising exercise, announced on 6 September. With the recent unit-price stability (and even a mild recovery) and a higher sustainable leverage-ratio assumption, we have revised up our distribution-per-unit (DPU) forecasts and raised our six-month target price, based on our RNG valuation method, to S$1.06 from S$0.98.

– The equity fund raising, subject to unitholders’ approval at an Extraordinary General Meeting (EGM) scheduled for 25 September, will be through a private placement, which management expects to be completed by the end of October. The funding will be for acquisitions announced already, which comprise 1 Tuas Avenue 3, 9 Bukit Batok Street 22, 7 Ubi Close, 120 Pioneer Road, 48 Toh Guan Road East, and 23 Woodlands Terrace. We have already incorporated the estimated contributions from these target properties into our forecasts.

– We have not changed our acquisition assumption of S$500m for 2007, so the only change to our forecast lies in our equity-financing assumption. We now assume that Cambridge will raise the announced S$193.9m for 2007 (from our previous assumption of S$330m). The lighter-than-expected fund raising would leave it with an estimated leverage ratio of 48.4% at the end of the year, much higher than the estimated year-end leverage of 34.8%, based on our previous assumption. Instead of raising enough equity to meet its financing requirements up to late 2008, we now assume that Cambridge’s financing strategy will be to raise enough equity to tide itself over until early-to-mid 2008, when we expect another major equity financing exercise.

– With the change in our equity-financing assumption and the recovery of its unit price (we have raised our placement-price assumption to S$0.78, from S$0.75 previously) since our previous report (see Yield screams louder, published on 20 August), we have revised up our DPU forecasts by 3.0% for 2007, 6.0% for 2008 and 10.5% for 2009. We caution that our DPU forecasts are highly sensitive to price assumptions (due to their direct impact on the number of units outstanding) for future fund raising.

– We have raised our six-month target price, based on our RNG valuation method, to S$1.06 from S$0.98, due to our higher assumptions for the placement price and recurrent-leverage ratio (loan to asset) of 45% (from 40% previously).

tfwee September 13, 2007 ESR No Comments »

Parkway Life – SGX

COMPLETION OF SETTLEMENT FOR EXERCISE OF OVER-ALLOTMENT OPTION

Further to the announcement on 7 September 2007 issued by UBS AG, acting through its business group, UBS Investment Bank, in respect of, inter alia, the exercise of the overallotment
option granted by Parkway Investments Pte Ltd in connection with the initial public offering of Parkway Life Real Estate Investment Trust (“Parkway Life REIT”), Parkway Trust Management Limited, the Manager of Parkway Life REIT, wishes to announce that pursuant thereto, the Joint Lead Underwriters have today completed the settlement for the exercise of the over-allotment option of 11,097,000 Units granted by Parkway Investments Pte Ltd.

Pursuant to the exercise of the over-allotment option by the Joint Lead Underwriters, Parkway Investments Pte Ltd holds 213,257,000 Units (approximately 35.46% of the total issued Units
in Parkway Life REIT).

Citigroup Global Markets Singapore Pte. Ltd. and UBS AG, acting through its business group, UBS Investment Bank, were the joint global co-ordinators, joint bookrunners and joint lead
underwriters to the initial public offering of Parkway Life REIT.

tfwee September 13, 2007 PLife No Comments »

AllCo – SGX

CLAIM BY (1) GUY CARPENTER & COMPANY PRIVATE LIMITED, (2) WILLIAM M. MERCER (S) PTE LTD, AND (3) MERCER OLIVER WYMAN PTE LTD

The Board of Directors of Allco (Singapore) Limited (the “Manager”) wishes to announce that Allco (Singapore) Limited, in its capacity as the manager of Allco Commercial Real Estate Investment Trust (“Allco REIT”) (SGX:ALLC), together with British and Malayan Trustees Limited, in its capacity as trustee of Allco REIT (the “Trustee”) and Unicorn Square Limited, have, on 5 September 2007, been served with a Writ and an Indorsement of Claim (collectively, the “Writ”) by Guy Carpenter & Company Private Limited, William M. Mercer (S) Pte Ltd and Mercer Oliver Wyman Pte Ltd (collectively, the “Claimants”). Unicorn Square Limited is the master tenant of the China Square Central Property (being the premises located at 18, 20 and 22 Cross Street, Singapore) owned by Allco REIT.

The Claimants were tenants in a 15-storey office and retail development known as Marsh & McLennan Centre at 18 Cross Street, which comprises a part of the China Square Central Property. Their respective leases expired on 30 June 2007. In the Indorsement of Claim, the Claimants have claimed that they are entitled to a renewal of their leases from 1 July 2007 to 30 June 2012, based on the terms of the leases which have expired, and/or damages. The Manager has been informed that the Claimants will file a Statement of Claim in due course.

The Manager intends to defend the claims made by the Claimants vigorously, and also to instruct the Trustee to do so. The Manager has taken legal advice and is of the opinion that the claims are without merit. The leases were not renewed as a result of the Claimants’ failure to properly exercise the options to renew. Notwithstanding the expiry of their leases, the Claimants have remained in occupation of the premises, and it has been made clear to them that the continued occupation (pending the determination of the issues by the court), is on the basis that they are holding over and therefore liable for double rental. In the meantime, monthly rental payments received from the Claimants have been accepted on the basis that they are payments on account for the double rent payable in the period of occupation from 1 July 2007 onwards.

In the event that the Claimants succeed in their claims, they will be entitled to a renewal of the leases on substantially the same terms as the earlier leases. The Manager’s position is that the Claimants, having remained in occupation throughout, would not have suffered any damage.

In the event that the Claimants fail in their claims, but desire to remain in the premises, they will be required to enter into fresh leases on terms to be agreed. They will also be liable to pay double rental for the period of holding over. In either case, rental is and will continue to be payable to the Trustee under the terms of the master lease between the Trustee and Unicorn Square Limited, and thus the income of Allco REIT derived from the China Square Central Property will not be affected by the proceedings commenced by the Claimants.

Further announcements will be made by the Manager as and when appropriate.

Source : SGX

tfwee September 13, 2007 AllCo, FCOT No Comments »

Rickmers – BT

Rickmers signs deal to buy 4 new vessels

This, together with a recent acquisition, will more than double its capacity

RICKMERS Maritime, which was floated on the Singapore Exchange (SGX) mainboard in May, has set sail to more than double its contracted fleet capacity. The business trust, which owns and operates containerships, said yesterday that it has signed a memorandum of understanding (MOU) to purchase four new 4,250 TEU (twenty-foot equivalent unit) vessels at US$69 million each.

This acquisition, together with a recently announced acquisition of four 13,100 TEU container vessels, will propel Rickmers to a contracted fleet capacity of 110,310 TEUs, up from 40,910 TEU.

The latest four vessels, to be acquired from Polaris Shipmanagement Company, are scheduled for delivery between February and December 2009 from the Jiangsu shipping facilities of Yangzijiang Shipbuilding (Holdings), also an SGX mainboard company.

Each vessel, to be paid on delivery, will commence service upon delivery with seven-year, fixed rate time charters to Hanjin Shipping in Seoul at US$25,950 per day.

Hanjin, Korea’s largest carrier that operates about 60 liner and tramper services transporting more than 100 million tonnes of cargo annually worldwide, also has the option to extend the charter period for another three years at a higher rate of US$27,950 per day.

Each of the new vessels is expected to contribute about US$9 million in revenue and US$7 million in Ebitda (earnings, before interest, tax, depreciation and amortisation) per annum in the initial years, which should add to distributable cash flow, said Quah Ban Huat, CFO of Rickmers’ trustee-manager.

Financing is being arranged, he said.

The four vessels are among the nine 4,250 TEU vessels that Rickmers said, during its IPO, that it would have the right of first offer to purchase.

‘With this acquisition in place, we will boast a more diversified network of liner companies that we collaborate closely with,’ said Thomas Preben Hansen, CEO of the trustee-manager.