DBSV S'pore Wired Daily 12 December 2013

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Publish date: Thu, 12 Dec 2013, 06:09 PM

Possible exit offer for China XLX

China XLX Fertiliser has been approached by controlling shareholder Pioneer Top Holdings over a possible exit offer for the shares that it does not yet own. The offer, if made, is not intended to take the company private as China XLX shares will continue to be listed in Hong Kong. China XLX said the possible exit offer would be at a cash consideration of 40 cents per share, and is in connection with a possible voluntary delisting from Singapore Exchange. The consideration price is at a 23% premium to China XLX's last traded price of 32.5 cents. Pioneer Top Holdings and its concert parties now hold a 64.9% interest in the company. China XLX also has yuan-denominated convertible bonds worth about RMB324m (S$67m), which can be converted to 176m shares at a price of RMB1.84 per share.

Swiber Holdings is disposing its 33.3% stake in PJW 3000, a vessel owning company that owns a construction barge, for approximately US$52m. This transaction is part of the Group strategy to restructure certain existing vessels under various leasing arrangement. The unaudited gain on disposal was approximately US$16.6m.

Vallianz Holdings has received shareholders' approval for the grant of options to Swiber and the issuance of capital securities to Rawabi. Shareholders have also endorsed its diversification into the area of sourcing and supplying of vessels and equipment and additional shipping-related services to the offshore oil and gas industry. The total proceeds of US$57.2m which could be raised from the issue of the option shares, as and when the options are exercised by Swiber, and the proceeds from the issue of capital securities to Rawabi, is intended to be used for capital expenditure relating to future fleet expansion and general working capital purposes.

SPH announced that its wholly owned subsidiary is the leadinvestor in a Series B US$10m round of funding in Magzter Inc (Magzter), a global digital magazine store and newsstand. The other co-investor is Kalaari Capital (Kalaari), a venture capital fund investing in global technology-oriented companies.

Following positive feedback and strong enquiries from the market, Keppel Corp is proceeding with the building of its new CAN DO drillship. When completed in 2016, the drillship is expected to be a state-of-the-art deepwater exploration, development and completion drilling vessel.

The International Air Transport Association (Iata) said that next year could be one of the strongest yet for aviationthis century. A bottom line of US$16.4 billion - second only to the 2010 record of US$19.2 billion - is expected as a result of improving business conditions and easing oil prices. Regional airlines is expected to chalk up a profit of US$3.6 billion next year, 16% higher year on year, fuelled by a recovering cargo market and growth in the Chinese domestic market. Brent oil prices are expected to slide to US$105 per barrel from an anticipated US$109 per barrel this year, but yields for the passenger market will shrink 0.5% y-o-y, and the cargo market, by 2.1% - even as both post traffic growth. This year, Iata expects the industry's net profit to hit US$11.7 billion. This is less than an earlier estimate of US$12.7 billion, but is still nearly 60% more than the US$7.4 billion made last year.

The outlook for the Asian consumer electronics industry is negative in 2014, said Moody's. Operating profit margin will remain below 3% for most rated companies due to a lack of product differentiation and high penetration rates in key products like LCD televisions, as well as the convergence of smartphones and mobile devices, driving intense competition. It also revealed stronger demand in emerging countries for mid to low-tier products, which carry lower average selling prices; and significant cash outlays required to defend market

positions and remain competitive.

According to a MAS survey, optimism is on the rise here. Professional forecasters now expect the Republic's economy to expand by 3.8% in 2013 - up from the 2.9% median forecast seen in September's survey. This puts growth just above the mid-point of the government's projection of 3.5-4%, which was raised last month from an earlier forecast of 2.5-3.5%.

Singapore deal-making is expected to pick up in 2014. The past year was mixed for deal-making in Singapore, with equity fund-raising picking up while mergers and acquisitions (M&A) slowed down. But industry professionals see a tailwind blowing into 2014 as global economies head towards modest growth, although macro uncertainties like US Federal Reserve "tapering" cast shadows over the horizon.

US stocks tumbled as investors bet that a new U.S. budget deal raises chances the Federal Reserve might start to scale back its support for the economy soon. Congressional negotiators reached a deal that would prevent another government shutdown, if approved by the House and Senate. The deal would set spending levels, reduce the deficit and relieve some of the arbitrary, forced spending cuts. Bank stocks were under pressure after federal regulators officially approved new restrictions to curb high-risk trades by banks.

Source: DBSV

SPH (T39)

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