Daily news - 27 Mar

SIAEC's Gulf Air contracts top US$100m
SIA Engineering Company (SIAEC) – In one of its biggest maintenance deals with any single offshore client, SIAEC has clinched a three-year fleet management programme (FMP) with Gulf Air, bringing to more than US$100 million the total value of the services for the Bahrain-based carrier's current Airbus fleet. The FMP deal commencing in June this year will complement the current US$21 million three-year heavy maintenance or 'C-check' contract that was signed between the companies in February last year. SIAEC, a Singapore Airlines subsidiary, said yesterday that the FMP contract calls for the provision of maintenance and fleet management services for Gulf Air's current Airbus fleet of 29 aircraft and the 35 Airbus aircraft to be delivered to the airline in the future. 'Together with the new FMP contract, the total value of the services for Gulf Air's fleet of 29 Airbus aircraft is more than US$100 million,' SIAEC said. Under the FMP contract announced yesterday, SIAEC will provide a wide range of FMP services, including 'A' and 'C' checks, fleet technical management, material management and engineering services. The 'A' checks will be done in Bahrain, while the 'C' checks will be done in Singapore. With the addition of Gulf Air, SIAEC's FMP customer base now covers nine airlines with a total fleet size of 173 aircraft, of which 62 are currently in service and the rest are due to be delivered within the next five years.

CDL sells 60 units in The Arte at Thomson
City Developments Ltd (CDL) sold about 60 apartments at its 336-unit project The Arte at Thomson last weekend. The developer said yesterday that the average selling price was $880 per sq foot (psf). It released 100 units during the 'private preview' and will release more this weekend. The freehold project comprises two-, three- and four-bedroom apartments, as well as penthouses. Most of the units sold last weekend were smaller two- and three-bedders. Unlike other recently launched projects, units at The Arte are large, which means buyers have to fork out more. For example, two-bedders are 1,055 sq ft and three-bedders range from 1,399 sq ft to 1,625 sq ft. Assuming $880 psf for a two-bedder, the price of the smallest unit would be $928,400. But according to CDL general manager Chia Ngiang Hong: 'The Arte offers superb value for a prime freehold property in the Thomson area. Buyers get a luxurious condo without paying a premium price.' CDL is offering an interest absorption scheme.

CMT's rights issue over-subscribed
CapitaMall Trust (CMT), Singapore's largest real estate investment trust by market capitalisation, yesterday said that its $1.23 billion rights offer was over-subscribed based on initial tallies at the close of the rights offer on March 25. 'Acceptances and excess applications have been received for more than the total number of rights units offered pursuant to the rights issue,' CMT said in a filing to the Singapore Exchange. The trust did not provide details of the amount of the oversubscription. Parent company CapitaLand similarly said on March 13 that its $1.84 billion rights issue had been over-subscribed. CMT shares gained 16 cents, or 12.5 per cent, to close at $1.44 yesterday amid a broad gain in the market. The benchmark Straits Times Index closed 4 per cent up at a two-month high. CMT on Feb 9 announced the $1.23 billion rights issue in a 9-for-10 rights offer. The trust, which is 29.7 per cent owned by CapitaLand, said that it will use most of the proceeds to pay off $956.2 million of debt due this year. The balance will be used to pay for asset enhancement initiatives as well as for general corporate and working capital purposes. The rights issue will also reduce CMT's gearing from 43.2 per cent to 29.1 per cent.

ST Engg unit acquiring two China firms
Singapore Technologies Engineering is buying majority stakes in two Chinese makers of road construction and maintenance equipment for a total of 162 million yuan (S$36 million). ST Engineering said yesterday its land systems arm ST Kinetics has signed two agreements to buy a 59 per cent stake in the two firms - Zhenjiang Huachen Huatong Road Machinery Co (HCHT) and Zhenjiang Huatong Aran Machinery Co (HTAR) - from their majority shareholder for 85 million yuan. The acquisitions are subject to ST Kinetics buying a further 33.11 per cent stake in HCHT and another 16.3 per cent of HTAR from the two companies' other shareholder, Jiangsu Huatong Machinery Co - which owns the remaining 41 per cent of both firms - for a total of 52 million yuan. If the acquisitions are approved by Chinese regulators, ST Kinetics will own 92.11 per cent of Huachen Huatong and 75.3 per cent of Huatong Aran. ST Kinetics plans to inject a further 25 million yuan in cash into HCHT after the deals are completed, while Jiangsu Huatong Machinery will inject land, on which some of the factory buildings of HCHT are situated, into the firm. The land injection from Jiangsu Huatong Machinery will dilute ST Kinetics' final stake in HCHT to 75.3 per cent, the same as its stake in HTAR. Jiangsu Huatong Machinery will own the remaining 24.7 per cent stake in each of the two companies. The acquisitions 'are in line with ST Kinetics' strategy to grow its specialty vehicles business in China and the region', ST Engineering said in a statement.

Source: Kim Eng