Author: tfwee
APL – BT
APL Reit puts back IPO, cites market jitters
It says it will list next year as weak price would hike costs, hurt growth
POOR market sentiment has claimed a casualty in APL Japan Trust. The Singapore Exchange aspirant has postponed its planned initial public offering (IPO) here, at a time of volatility in the stock market.
In a statement released yesterday, the real-estate investment trust (Reit) said that it has decided to postpone its IPO to next year, despite a successful book-building exercise which saw sufficient investor-take up. APL said that it plans to go to the markets next year, when the wider financial environment improves.
‘Following a successful road-show where it was evident that investors endorsed the management and strategy, we were confident of being able to list APL Japan Trust,’ said David Tan, CEO of APL Japan Trust Management, in a statement. ‘However the markets are currently unfavourable and even though the fundamentals of our transaction are sound, there is a risk of post-listing price weakness as a result of negative market sentiment.’
He said that weakness in the trust’s unit price after listing would raise its cost of capital and make growth by acquisition more challenging.
William Schoenfeld, president of APL Group, said: ‘Given the possible unit price weakness post-listing as a result of current macro issues, APL Group could not be fully confident of achieving our projections for growth through acquisitions, therefore it is possible that total returns would not commensurate with APL’s past performance.’
The unfavourable outlook in Japan caused by negative consumer sentiment has caused the Tokyo Stock Exchange Reit Index to plunge sharply. Because of this, APL Japan Trust’s prospects were uncertain.
BT understands that the decision to pull the plug was taken at midnight on Thursday. APL Japan Trust – the second Japan-based Reit to seek a listing on the SGX after Saizen Reit – had already received approval from the Monetary Authority of Singapore to list, and its prospectus was scheduled to be registered yesterday.
It had planned to raise between $432.5 million and $514.9 million by offering 411.9 million units, 391.3 million of which would have gone to institutional and other investors in Singapore, and 20.59 million units to the public here priced between $1.05 and $1.25 each.
JPMorgan was the sole financial adviser for the offering, while JPMorgan and Lehman Brothers International were joint global co-ordinators and joint bookrunners.
The initial property portfolio of the Reit comprised nine commercial buildings in Tokyo, Yokohama and Nagasaki. These buildings have an appraised value of $838.8 million and are primarily for retail use.
According to the prospectus, APL Japan Trust forecasted an initial distribution yield of 4.34 to 5.16 per cent per unit and cash distribution growth of about 7 per cent.
Mr Schoenfeld said in a statement: ‘APL Japan Trust was to be APL Group’s first entry into the public markets after building its reputation in Japan for more than 10 years.’
The Reit sponsor, Asia Pacific Land, is a Japanese real estate company managing a real estate portfolio worth over 100 billion yen (S$1.3 billion).
APL’s decision might prove to be prudent. Yesterday, units of Saizen Reit debuted at 94 cents, 6 per cent below their issue price of $1.
The trust, sponsored by Japan Regional Assets Manager, raised $197 million from its IPO, which was about 2.4 times oversubscribed.
The Reit is based on an initial portfolio of 146 residential buildings in 12 Japanese cities, and according to its prospectus would offer a forecast yield of 6.5 per cent in 2008.
APL – BT
Japan’s Asia Pacific Land delays S’pore IPO
SINGAPORE – Tokyo-based Asia Pacific Land, or APL Japan Trust, will postpone a planned US$350 million initial public offering in Singapore after it grew concerned about the performance of the issue after the listing, the company said on Friday.
Asia Pacific Land’s decision comes after a disastrous Singapore market debut by Saizen Real Estate Investment Trust, which fell 14 per cent on its debut on Friday.
Saizen last traded at 86 Singapore cents against its IPO price of $1.00.
APL, which owns 9 properties in Japan, had planned to raise as much as $515 million (US$358 million) through an offer of 411.9 million units at $1.05 to $1.25 apiece, according to a prospectus posted last month.
‘There is a risk of post-listing price weakness as a result of negative market sentiment,’ said APL chief executive David Tan in a statement. ‘Weakness in APL Japan Trust’s unit price post listing would raise its cost of capital and make growth by acquisition more challenging.’
A source involved in the listing said APL had attracted sufficient demand to sell the units within the original price range, but chose to drop the listing so as not to upset investors.
Since APL started marketing its units last month, the price of Japanese-listed Reits had fallen about 12 per cent, he added. JPMorgan and Lehman Brothers were the bookrunners for theAPL listing. — REUTERS
Huflux Water Trust – BT
Hyflux trust sets IPO price range
A BUSINESS trust backed by Singapore water treatment firm Hyflux has set an indicative price range of $0.78 to $0.91 a unit for its Singapore listing, potentially raising $150.15 million, a source told Reuters yesterday.
Hyflux Water Trust, which is based on 13 water treatment plants in China, is selling 165 million units in its stockmarket listing, according to its prospectus. JPMorgan is handling the deal.
At the indicative price, the trust would offer a yield of 4.9 to 5.7 per cent, the source said.
China is thirsty for more clean water to feed its economic growth. For plant builders such as Hyflux, injecting the completed factories into a trust frees up capital for it to expand elsewhere. — Reuters
Rickmers – BT
Rickmers’ quarterly profit 54% above projection
Shipping business trust’s revenue exceeds estimate by 19% at US$13.5m
SHIPPING business trust Rickmers Maritime yesterday reported its first full quarter of results since its initial public offering (IPO) in May, with net profit coming in at US$8.4 million, 54 per cent higher than projected.
Revenue was 19 per cent higher than projected, at nearly US$13.5 million.
This was due to the early delivery by over a month of a sixth containership, which led to over $2 million more in revenues and $900,000 in unanticipated profits, said the trustee-manager’s chief financial officer Quah Ban Huat.
With a lower-than-anticipated cost of lubricant oil, the early delivery led to Rickmers recording cash flow from operating activities of almost $10.4 million, over a quarter more than expected, he said.
Mr Quah emphasised the importance of cash flow, saying that as a business trust, Rickmers pays its distributions out of this item.
The trust will be making a quarterly distribution of 2.14 US cents per unit, payable this month. This is in line with its projection at the time of its IPO, and works out to an annualised 8.56 US cents. At Rickmers’ closing share price of S$1.44 yesterday, this represents an annual yield of over 8.6 per cent.
Asked whether the stronger cash flow might lead Rickmers to increase its payout, Mr Quah said it ‘will evaluate the possibility of doing so only at the appropriate time’.
During the quarter, Rickmers announced the acquisition of 13 new containerships, which will be delivered through end-2010.
All come with accretive, long-term fixed rate time charters to three of the world’s most reputable liner companies, said chief executive Thomas Preben Hansen.
The 13 vessels include four containerships of 13,100 TEUs (twenty-foot equivalents) each, which will be among the world’s largest when constructed. They also include nine containerships of 4,250 TEUs each.
The charter periods are also staggered – with only one ship becoming available in the next seven years – so that there is less risk of several ships having their charters expire during a downturn in the market, said Mr Hansen.
Downturns tend to be ‘fairly short and sharp’ and may ‘hit on a few ships’ but would not impact the trust’s ability to pay its distributions, he said.
Rickmers intends to focus on containerships, especially large ones of above 10,000 TEUs in capacity, for the time being, Mr Hansen also said. The segment enjoys double-digit growth year-on-year, compared with the 2 or 3 per cent growth rates in the dry bulk and carrier segments, so it can absorb over-capacity very quickly, he said.