Once again, we bring you interesting corporate snippets, this time from three blue-chip companies and a REIT.
Sembcorp Industries Limited (SGX: U96)
Sembcorp Industries Limited, or SCI, is once again showing its commitment to renewable energy.
Its subsidiary, Sembcorp Utilities, has inked a collaboration agreement with BCG Energy, a unit of Bamboo Capital Group, for the development of renewable projects in Vietnam.
BCG is one of the heavyweights in Vietnam’s renewable energy space and has strong knowledge of the local market and a track record of developing large-scale infrastructure projects.
Both parties will work together to develop a pipeline of up to 1.5 gigawatts (GW) of wind and solar projects in Vietnam.
The first phase of this partnership involves the development of a 550 MW portfolio of utility-scale nearshore and onshore wind assets across three provinces — Ca Mau, Tra Vinh, and Soc Trang.
The initial capital outlay will be US$30 million and the projects are expected to be completed by the end of 2022.
First REIT (SGX: AW9U)
First REIT, a healthcare REIT with a portfolio of 20 properties across Asia that comprises hospitals, nursing homes, and eldercare facilities, announced its new “2.0 growth strategy” as well as an acquisition.
This announcement comes more than a year after the REIT’s lease restructuring for 16 of its Indonesian hospitals.
For its refreshed growth strategy, the REIT aims to reduce its Indonesian asset concentration down to less than 50% of its portfolio in three to five years.
It will also endeavour to recycle capital from non-core assets and diversify its funding sources.
In line with these goals, First REIT announced the acquisition of 12 freehold nursing homes in Japan for a consideration of around S$163.2 million.
The purchase will be funded by a mix of cash and the issuance of new First REIT units at S$0.305, a 3.4% premium to the close as of 6 December 2021.
The properties have 1,451 rooms, committed occupancy of 100% and a weighted average lease expiry of 22 years.
This acquisition will diversify the REIT’s assets and rental income, with around 27.1% of assets under management coming from developed markets, up from the current 3.6%.
For its fiscal 2021 first half (1H2021) rental income, the proportion from third parties (tenants who are not related to their sponsor or its subsidiaries) will rise from 28% to 41%.
Distribution per unit is expected to inch up by 0.8% to S$0.0131 for 1H2021 while gearing will be at 36.4% post-acquisition.
Yangzijiang Shipbuilding Holdings Ltd (SGX: BS6)
Yangzijiang Shipbuilding, or YZJ, one of the largest shipbuilding companies in China, has announced that it is exploring a possible spin-off and listing of the group’s investment division.
The spin-off will focus on asset management and direct investments and this exercise will create two separately-listed companies.
The intention for the spin-off is to allow YZJ to focus on its core business of shipbuilding while allowing for the investment division to independently raise capital to seek further growth.
The investment segment deals with micro-financing, debt investments, and other types of investments.
The group is aiming for a timeline of six to 12 months to complete the exercise subject to the required approvals from its shareholders and the relevant authorities.
If successful, the new company will be listed by way of introduction on the Singapore exchange.
Shareholders of YZJ will receive shares of the spin-off company as a dividend-in-specie proportional to their shareholdings.
City Developments Limited (SGX: C09)
City Developments Limited, or CDL, is one of the largest property developers in Singapore with a market capitalisation of S$6.4 billion.
The group has announced the acquisition of Central Square, a 99-year leasehold commercial and residential development, for S$315 million.
The property’s remaining lease tenure is 72 years and CDL intends to redevelop the site into a mixed-use development with commercial, hospitality and serviced apartment components.
With permission obtained under the Urban Redevelopment Authority’s Strategic Development Incentive Scheme, the project could potentially yield a 67% surge in gross floor area to around 735,500 square feet.
CDL is contemplating adding a residential component to the development and will work closely with the authorities to assess its viability.
CEO Sherman Kwek has remarked that the Central Square project represents CDL’s third rejuvenation initiative in the Central Area.
The other two projects are the redevelopment of Liang Court in collaboration with CapitaLand Development, and the former Fuji Xerox Tower at 80 Anson Road.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.
