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Stocks to watch: Keppel Corp, Keppel-KBS US Reit, SPH, MLT, Cache, AA Reit
THE following companies saw new developments that may affect trading of their shares on Wednesday:
Keppel Corporation: Keppel Offshore & Marine's (Keppel O&M) subsidiary, Keppel Shipyard, has received final approval to start full conversion works for the Gimi Floating Liquefaction Vessel (FLNG) project, worth some US$947 million. Gimi MS Corporation, a subsidiary of Golar LNG Ltd, granted the final notice, which builds on a limited notice to proceed issued on Dec 17, 2018. Delivery of the vessel is expected in the first half of 2022, Keppel Corp said. It added that the project will be similar to work done on the first converted FLNG vessel, Hilli Episeyo, which Keppel delivered to Golar LNG. Keppel Corp shares closed flat at S$6.61 on Tuesday.
Keppel-KBS US Reit: The Reit (real estate investment trust) on Tuesday declared a distribution per unit (DPU) of 1.50 US cents for the first quarter, 23 per cent higher than the forecast 1.22 US cents. This was on the back of contributions from two acquisitions, positive rental reversion and healthy leasing momentum. They resulted in a higher gross revenue of US$29.4 million, up 24.2 per cent from US$23.7 million a year ago. The Reit's DPU for the first quarter was up 30.4 per cent, compared to an adjusted DPU of 1.15 US cents for Q1 2018. Distributable income rose to US$12.4 million, up 30.7 per cent from the first quarter of 2018. Keppel-KBS US Reit units closed at 72 Singapore cents on Tuesday before results were released, down 1.5 cents or 2.04 per cent.
Singapore Press Holdings (SPH): SPH has added £133.7 million (S$236.5 million) worth of assets to its UK student accommodation portfolio, increasing by 1,243 beds to 5,059 beds across 20 assets in 10 cities. The company, which publishes The Business Times, in a regulatory filing on Tuesday announced that its three wholly owned subsidiaries Straits Five, Straits Six and Straits Eight have entered into a sale-and-purchase agreement with Habitus Holdings, Privilege Holdings, Privilege Southampton Holdings and AIGGRE Europe Real Estate Fund I GP to acquire a set of purpose-built student accommodation (PBSA) assets in the UK for about £133.7 million in cash. These acquired assets are located in Southampton, Sheffield and Leeds - where there are sizeable full-time student populations - and have a total capacity of 1,243 beds with strong occupancy rates of over 90 per cent. Further, the purchase provides a rental guarantee that covers the 2018/2019 and 2019/2020 academic years, offering earnings visibility, as SPH integrates the assets into its portfolio of PBSA managed assets. SPH closed one Singapore cent higher at S$2.45 before the announcement.
Mapletree Logistics Trust (MLT), Cache Logistics Trust (Cache), Aims Apac Reit (AA Reit): MLT became the latest landlord to state that logistics provider CWT Pte Ltd, whose Hong Kong parent has failed to pay creditors, has not defaulted on its rental payments. Trust manager Mapletree Logistics Trust Management said CWT Pte Ltd had no arrears due to date from current tenancy agreements for five MLT properties at 5A Toh Guan Road East, 4 Pandan Avenue, 6 Fishery Port Road, 38 Tanjong Penjuru and 52 Tanjong Penjuru. MLT also noted that it holds security deposits of six months of rental.
On Tuesday, CWT Pte Ltd's parent, CWT International, reported that it was facing claims by creditors after it missed interest and fee payments to lenders of a HK$63 million (S$10.9 million) amount, triggering a cross default of a HK$1.4 billion facility. CWT International's 100 per cent stake in CWT Pte Ltd is charged as security for that debt, raising the possibility that the lenders could seek to take possession of CWT Pte Ltd if CWT International does not pay up by Wednesday, April 17.
Concerns about CWT Pte Ltd's ability to pay its rents led to a selldown on Tuesday of real estate investment trusts in Singapore that were landlords for the Singapore tenant. Cache and AA Reit have both said that CWT had not defaulted in its rental payments, and that there were no arrears due. MLT units closed at S$1.42 on Tuesday, down 4 per cent. Cache fell 5.3 per cent to close at 71.5 Singapore cents, while AA Reit slipped 1.4 per cent to S$1.39.