Here are some snippets from three companies that have been making the headlines this week.
China Evergrande (SEHK: 3333)
China Evergrande, the beleaguered Chinese property firm that is saddled with a ton of debt, missed paying its second bond interest payment due on 29 September.
With a debt pile of US$305 billion, the conglomerate is struggling to service its coupon payments and has missed its second scheduled debt obligation in a week.
Technically, though, the company has not recorded an event of default as it still has a 30-day grace period for coupons that were due on the 23 and 29 of September.
The real reckoning will come by the end of this month as the property giant struggles to raise cash to get itself out of its worst-ever predicament.
China Evergrande’s desperate bid to raise cash has seen it offering property discounts of up to 40% for those who can pay up in cash.
Chinese authorities have also encouraged other property developers to purchase some of Evergrande’s assets to help it generate more cash, while the company announced that it will sell a US$1.5 billion stake it owns in Shengjing Bank (SEHK: 2066) to a state-owned asset management company.
Investors are worried that the collapse of the vaunted property company may trigger a crisis similar to the one sparked off by Lehman Brothers that led to the Global Financial Crisis.
As the company scrambles to raise cash by selling off its disparate divisions, investors are waiting with bated breath to see how events will unfold.
There could be repercussions for multiple industries with a ripple effect that may spread far and wide.
According to Bloomberg, MAS is said to be checking with Singapore’s banks for their exposure to Evergrande.
Mapletree Investments Pte Ltd
Mapletree Investments Pte Ltd, or MIPL, is a real estate development, investment and property management company.
As of 31 March 2021, it owns and manages S$66.3 billion worth of properties that span a wide variety of asset sub-types such as data centres, industrial, lodging, logistics, retail, office, and residential.
Just this week, the property giant announced that it has expanded its logistics portfolio through the acquisition of two portfolios of logistics assets.
These portfolios comprise 141 properties and cost a total of US$3 billion.
According to the firm, the assets are well-located in core logistics hubs and are situated near transportation nodes such as highways, air and seaports.
The new logistics portfolios also enjoy a diversified tenant base that includes companies from the consumer goods, wholesale and e-commerce industries.
The acquisitions will form the seed portfolio for a potential US logistics private fund called Mapletree US Logistics Private Fund and will raise MIPL’s logistics assets under management (AUM) to around S$25.5 billion.
This major acquisition follows just a week after MIPL announced that it had raised US$552 million for its inaugural US Office Fund, Mapletree US Income Commercial Trust.
This trust targets a 12% internal rate of return contributed by both growth and income underpinned by a resilient portfolio of US office assets.
The successful close of the fund has pushed up MIPL’s private fund AUM to US$10.5 billion.
Jardine Matheson Holdings Limited (SGX: J36)
Jardine Matheson Limited, or JML, is a diversified group that owns a broad portfolio of operating businesses ranging from retail and property to hotels and automobiles.
JML owns interests in Hongkong Land (SGX: H78), Dairy Farm International (SGX: D01), Mandarin Oriental (SGX: M04) and Jardine Cycle and Carriage Ltd (SGX: C07).
On Thursday, the group announced a proposed share buyback scheme to return US$250 million to shareholders.
The purpose of this buyback is to reduce the capital of the company and is a follow-up to the acquisition and privatisation of Jardine Strategic back in March.
JML has seen an improvement in its business for the fiscal 2021 first half (1H2021).
Revenue increased by 10% year on year to US$17.5 billion while underlying profit surged by 65% year on year to US$615 million.
The conglomerate reported an 84% year on year jump in underlying earnings per share to US$1.86 while it kept its interim dividend constant at US$0.44 per share.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.
