Author: tfwee
Starhill – BT
* Holders offered 1 share for every share held at S$0.35 each
* Malaysia’s YTL to take up to 75% of rights issue
SINGAPORE – Singapore’s Starhill Global Real Estate Investment Trust on Monday proposed a rights issue to raise S$337.3 million (US$231.7 million) to reduce debt and get new funds for possible acquisitions.
The property trust, which is controlled by Malaysia’s YTL Corp, will offer shareholders one new unit for every existing share held at S$0.35 per rights unit – a discount of about 45 per cent to the last closing price of S$0.64.
YTL, whose units own about 26.6 per cent of Starhill, will take up its entire allotment of rights shares and will subscribe for up to 75 per cent of the rights unit, the property trust said in a stock market filing.
DBS is the sole financial adviser to the deal and the rights issue will be fully underwritten by DBS, Merrill Lynch and Credit Suisse.
Starhill’s assets include stakes in Orchard Road malls Wisma Atria and Ngee Ann City.
MI-REIT – BT
MI-Reit’s auditors raise going-concern flag
Trust manager says in response that it is working to effect refinancing of debt and funding of acquisition
MACARTHURCOOK Industrial Reit’s (MI-Reit) independent auditors have flagged the trust’s going-concern status in an emphasis of matter released yesterday.
‘At March 31, 2009, the group and the trust have interest-bearing borrowings of $224.4 million and $201.3 million, respectively, which are due for repayment within the next 12 months as well as an existing capital commitment of $91 million.
‘The refinancing of the borrowings and financing of the capital commitment have not been completed at the date of this report. These conditions indicate the existence of a material uncertainty that may cast significant doubt on the trust and its subsidiaries’ ability to continue as a going concern,’ KPMG LLP’s emphasis of matter, dated June 19, stated.
In response, MI-Reit’s manager, MacarthurCook Investment Managers (Asia), said yesterday: ‘The manager, together with its adviser, Standard Chartered Bank Limited, is working to effect the refinancing of the borrowings and to fund the capital commitment to acquire the property, and will make further announcements at the appropriate time.’
Last month, MI-Reit gained approval from its lenders, National Australia Bank and Commonwealth Bank of Australia, to extend to Dec 31, 2009, its $202.3 million loan facility – that had been reduced from $220.8 million – as it continues negotiation for longer-term refinancing.
Under the terms of the extension, failure by MI-Reit to settle the acquisition of the $91 million property at the International Business Park would be considered an event of default.
According to MI-Reit’s financial statement for the year ended March 31, 2009, the property was under construction and was due to be completed by the fourth quarter of this year.
‘Change in market conditions has meant that the fair value of the property is lower than the contracted amount. Consequently, a provision for onerous contract of $20 million has been recognised in the statements of total return,’ MI-Reit had said in the financial statements.
MI-Reit’s share price closed one cent higher at 33.5 cents in trading yesterday.
Rickmers – OCBC
Island top pattern suggests more near-term downside
– Rickmers Maritime is likely to face further correction pressure with the completion of an island top reversal pattern during yesterday’s negative breakout at the $0.56 key support level on heavy volume.
– This suggests that the previous rally from its early Apr low may be over.
– With the RSI cutting below both the 3-month uptrend line from inside the overbought region 2 days ago and the MACD displaying a sharp bearish crossover yesterday, they seem to echo our views that the further downside pressure could be building up.
– We expect the stock to find initial support at $0.45 (the next key resistanceturned support level), breaking which, the next support is likely at $0.32 (all time low)
– Immediate resistance is pegged at $0.56 (key support-turned-resistance level), ahead of $0.65 (2-year downtrend line).