Tuesday, September 30, 2008

Daily news - 30 Sep

KTT slide continues with 27.66% dive
Keppel Telecommunications and Transportation (KTT) – KTT shares continued to plunge yesterday - sinking 27.66%, after Friday's 43.9% dive - on sales by substantial shareholder Kapital Asia Pte Ltd, sources said. The two days of sales have wiped $1.4bn off the market capitalisation of KTT, which is more than 80%-owned by Keppel Corporation. The stock ended yesterday at $1.70, down 60% from last Thursday's close of $4.19. 5m shares changed hands yesterday, following the 5.1m traded last Friday. KTT typically has low liquidity. Often, less than 500,000 shares are transacted in a day. Hong Kong based-Kapital Asia, owned by Indonesian businessmen with interests in oil and gas, became a substantial shareholder in KTT in 2006, with 7.34%. By July this year, it had increased its holding to 9.27% or 51.136m shares. Based on KTT's annual report, Kapital Asia, an investment holding company, is controlled by Agus Anwar and Marcel Tjia. KTT filed changes in stockholding to the Singapore Exchange (SGX) after it received notification from Kapital Asia yesterday that the latter sold 2,658,000 shares on Sept 26 at between $4 and $3.50.

Raffles Edu to invest in new Tianjin college
Raffles Education Corporation – Plans to invest RMB3m (S$628,000) in a new college in Tianjin over the next five years, after getting the nod from the Tianjin Education Bureau. The new school - a collaboration with its Tianjin University of Commerce Boustead College in China - will offer advanced diplomas in fashion design, interior design, visual communication, and multimedia design, among others. The first intake is expected in January 2009, but this will not contribute significantly to the group's financial results for FY2009. With the addition of this new college, the group operates three universities and 25 colleges across nine countries in the Asia-Pacific region. For the year ended June 30, 2008, Raffles doubled its net profit to $98.8m, thanks to strong revenue growth, a jump in other operating income, and negative goodwill. Turnover came to $190 million, and EPS rose to 4.33 cents from 2.34 cents previously.

ST Engg US unit clinches US$393m navy deal
ST Engineering – The company's US shipyard unit, VT Halter Marine, has secured a US$393m contract for Phase II of the Egyptian Navy's Fast Missile Craft (FMC) project. This new deal, in addition to another US$13.5 million awarded due to changes in work scope in Phase I brings the total contract value for the overall project for the three FMCs to US$642m. Work commences immediately, and delivery of the first FMC is expected by mid-2012 with full completion by April 2013. ST Engineering had previously announced on Dec 1, 2005 that it had secured the initial Phase I functional design contract for approximately US$29m. At the time, it was estimated that the programme's value could grow to over US$450m after Phase II was added. Two subsequent contract modifications were awarded in November 2006 and June 2007 respectively for procuring the project's long lead items which added US$206.5m to the contract. Subsequent changes in the scope of work further increased the Phase I contract value to the current US$249.2m. This contract is not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of ST Engineering for the current financial year.

NOL, Hamburg party declare battle over Hapag-Lloyd
NOL - Both NOL and the Hamburg consortium have officially declared they have made binding bids for Hapag Lloyd, the container shipping business of Germany's TUI. But both parties declined to show their hands. The Hamburg-based group comprising main investor Kuehne & Nagel boss Klaus-Michael Kuehne as well as Hanse Merkur, the city of Hamburg, HSH Nordbank, Signal Iduna and MM Warburg did not reveal their bid but German newspaper Frankfurter Allgemeine Zeitung reported yesterday that the Hamburg consortium would bid more than 4bn euros (S$8.2bn) including debt for Hapag-Lloyd. NOL also did not reveal details, saying it 'remains bound by strict confidentiality undertakings, which legally restrict the company's ability to share information'. However, with its Temasek parentage the Singapore line is expected to easily match any competing offer. It is believed NOL has arranged a US$6bn loan to fund its bid. Hapag-Lloyd parent TUI is expected to make a decision by the middle of next month. An NOL takeover would make it the world's third biggest container line behind Maersk and Mediterranean Shipping Company.

Source: Kim Eng

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