CMT – BT

CapitaLand to raise $1.84b, Q4 net falls 88%

CapitaLand, Southeast Asia’s biggest developer, posted an 88 per cent plunge in quarterly net profit and said it will raise S$1.84 billion (US$1.23 billion) via a 1-for-2 rights issue.

Separately, CapitaMall Trust , a shopping mall real estate investment trust (REIT) managed by CapitaLand, said it would raise S$1.23 billion via a 9-for-10 rights issue at S$0.82 a unit.

CapitaLand, 40 per cent-owned by Temasek Holdings, attributed its sharp fall in quarterly net profit, which was above analysts’ expectations, in part to weaker sales in China and Australia.

Looking ahead, CapitaLand said it was difficult to predict the length and severity of the global economic downturn.

But it added it was in a strong financial position ‘to take advantage of the many financial opportunities that are likely to present themselves in future.’

CapitaLand, which owns about 30 per cent of CapitaMall, said it would subscribe for up to 60 per cent of the REIT’s rights shares to support the issue.

‘The rights issue is pre-emptive to strategically enhance the group’s financial flexibility,’ CapitaLand CEO Liew Mun Leong said in a statement. ‘We will also be well-positioned for any mergers and acquisitions opportunities that might arise.’ The property giant did not say if Temasek had committed to support its rights issue.

CapitaLand, which has its main operations in Singapore, China and Australia, posted October-December net profit of S$78 million, down from S$675 million a year ago. The figure was above the S$18 million forecast by 16 analysts polled by Reuters.

Full-year net profit dropped 54 percent to S$1.26 billion, compared with a consensus forecast for S$1.36 billion. The reported earnings did not include unrealised fair value changes, CapitaLand said.

CapitaLand said it will offer shareholders the right to buy one rights share for every two existing shares held at S$1.30 a share, a 45 per cent discount to the firm’s last traded price.

CapitaMall’s rights units are priced at a 43 per cent discount to their last traded price.

CapitaLand brought forward its earnings announcement by one day and suspended trading in its shares on Monday. — REUTERS