Saturday, January 31, 2009

Daily news - 30 Jan

Keppel unit's US$780m deal to build four rigs at stake
Keppel Corp's US unit Keppel AmFels' US$780 million deal to build four jackup rigs for US contract drilling services provider Rowan Companies may be at stake as the company announced in a filing with the US Securities and Exchange Commission that it is suspending construction work on one rig and negotiating payment terms on all four. Reuters reported on Monday that Rowan will eliminate its dividend, cancel the building of a jackup rig and suspend construction of another one that its own manufacturing unit is building, as well as the last of four that is being built by Keppel AmFels. This is to counter a fall in oil services demand. It also warned of contract cancellations, blaming tight credit conditions. The company said customers have been asking to delay or terminate their obligations to purchase equipment under construction, notwithstanding firm contractual commitments. 'Keppel AmFels has no obligation to revise its contractual terms on the orders from Rowan and will only accede to requests that do not adversely impact its financial position,' said a Keppel spokesman yesterday. The contract, signed in November 2007, valued each of the rigs at US$195 million and includes the cost of equipment which will be provided by the owner.

CapitaMall Trust will pass tax rebates on to tenants
CapitaMall Trust (CMT), which has pumped around $55 million into revamping Lot One Shoppers' Mall at Choa Chu Kang, said yesterday that it will help its tenants cope with the economic slowdown through various ways. 'We want the tenants to survive so that we can survive,' president and CEO of CapitaLand Liew Mun Leong told the press. CapitaLand manages CMT through an indirect wholly owned subsidiary, CapitaMall Trust Management Limited (CMTML). With the government giving out a 40 per cent property tax rebate for industrial and commercial properties this year in the Budget, CapitaLand has said that it will pass on rebates totalling $41.5 million to tenants in retail, commercial and industrial properties. This could translate to an estimated 4 per cent drop in rents, said Mr Liew.

Source: Kim Eng

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