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Stocks to watch: China Jinjiang Environment, Sunpower, Keppel Infrastructure Trust, Ace Achieve Infocom


THE following companies made announcements which could affect trading of their shares on Wednesday.

China Jinjiang Environment Holding: Waste treatment firm China Jinjiang Environment on Tuesday said that it has secured a concession from a local government to construct, own and operate a waste-to-energy facility located in Leting County, Hebei Province, with the project bearing an estimated total investment cost of about 330 million yuan (S$65.5 million). The group will construct, own and operate the facility for a total concession period of 30 years from the date of commencement of construction, which includes an operation period of 28 years from the date of commencement of commercial operation. The construction should be completed at the end of 2020.

Sunpower Group: Responding to queries from the Singapore Exchange, Sunpower said that is not in breach of any of the group’s loan provisions following unauthorised transfers of shares belonging to two of their substantial shareholders.  Sunpower has issued convertible bonds of US$110 million due 2022 to Glory Sky Vision (GSV) as well as a second tranche of convertible bonds for up to US$70 million due 2022 to Blue Starry Energy (BSE) and GSV. Under the agreements relating to bonds, executive chairman Guo Hongxin and executive director Ma Ming had provided irrevocable undertakings to GSV and BSE not to dispose of a certain percentage of their interests in the company's shares.

Mr Guo and Mr Ma had each entered into a loan agreement in their personal capacities with America 2030 Capital to take a loan for their personal use. They subsequently discovered that each of their 14 million ordinary shares, which had been deposited in a designated account as collateral, was allegedly no longer in the account.  Under the convertible bonds agreements, Mr Guo and Mr Ma are not to dispose of more than 20 per cent of their combined holdings in the shares of the companies unless the outstanding bonds have fallen below 5 per cent. "The company understands that the shares of Mr Guo and Mr Ma (of approximately 1.89 per cent each of the total issued share capital of the company), which have been transferred without authority, is less than the percentage as stipulated in the foregoing restriction," said Sunpower. 

Keppel Infrastructure Trust’s (KIT): It said on Tuesday that a delay in facility fees to its Australian electricity interconnector subsidiary Basslink has triggered a technical default on the project financing behind Basslink - a default that comes only as the shortfall in fees has meant that Basslink's project financing structure technically failed to meet the required debt service coverage ratio. The delay reflects disagreement over a two-month service outage this year between Basslink and Hydro Tasmania (HT), which is run by the Australian state government and that pays the facility fees now in question.

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KIT said that the outage, first announced on March 28 this year, occurred as a third-party contractor had damaged a piece of equipment during routine maintenance. The Basslink interconnector, which links the Tasmanian state’s electricity grid to the Australian mainland, returned to service on June 5. But Basslink did not receive facility fees for the period of the 2018 outage, as HT “does not accept” that the 2018 outage was a “force majeure” event. HT did not pay Basslink the full facility fees from July to August 2018.

Consequently, Premier Finance Trust Australia, the finance company for the Basslink group of companies, is unable via its trustee to meet the minimum debt service coverage ratio (DSCR) under the project financing for the Basslink Interconnector, thus resulting in a default. It added that an advance payment of A$4.1 million (S$4 million) had been made by the insurer to Basslink in July 2018 for business interruption loss.

Trading in Ace Achieve Infocom remains halted pending the release of an announcement. A trading halt was called on Monday.

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