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Stocks to watch: Perennial Real Estate, JES International, SIIC Environment, Sincap
THE following companies made announcements after the market closed on Thursday or before the start of trading on Friday that could affect their share prices:
Perennial Real Estate Holdings: It has entered into a 40:60 joint venture (JV) with China's private healthcare operator Guangdong Boai Medical Group Co to acquire, develop and manage healthcare services business in China. Guangdong Boai Medical Group is a subsidiary of China Boai Medical Group (Boai), one of the biggest private hospital/medical services operators in the country.
The Singapore company, through its wholly owned subsidiary Perennial HC, will acquire a 40 per cent stake in the JV for 286.7 million yuan (S$62 million) while the remaining 60 per cent stake will be held by a wholly owned subsidiary of Boai. Perennial will fund its 40 per cent stake through internal funds and bank borrowings.
The JV's first acquisition from Boai will be Modern Hospital Guangzhou, a leading private tumour and cancer hospital. The equity injection will be used to expand the hospital, boosting its bed capacity from 246 at present to nearly 300, as well as to fund its future growth plans, the group said in a release on Friday morning.
JES International: The Chinese shipbuilder said on Thursday night that it may mount legal action against its former chief executive and chairman Jin Xin - father of current chief executive Audrey Jin Yu - after it discovered potential financial irregularities related to him.
In addition, it has initiated proceedings against a former employee, Ju Li Li, who absconded with the group's administrative records and seals.
In a periodic review of its financials, the group discovered that unauthorised payments had possibly been made to Mr Jin, and that "questionable" transactions had taken place between the group and companies linked to him.
It has been unable to conduct an in-depth investigation as it had found that its financial records have been removed by Mr Jin's relatives.
It is at present trying to recover these materials. If the financial records show irregularities, the firms plans to hire an independent auditor to carry out a special audit and stressed it would "take all necessary action against Mr Jin" if the irregularities are attributed to him. Mr Jin owns 76 per cent of JES Overseas Investment, which is JES International's largest shareholder.
SIIC Environment: Its wholly owned subsidiary has won a 63.8 million yuan (S$13.9 million) project by the Wuhan City municipal government in China, it announced on Thursday. Under the build-operate-transfer project, Wuhan Huang-Pi Kaidi Water Services will build and operate a wastewater treatment plant with a design capacity of 25,000 tonnes a day, and for a concessionary period of 30 years. In the near term, the plant has a design capacity of 50,000 tonnes a day, and in the long term, 100,000 tonnes a day.
Sincap Group: It is acquiring mineral trading and logistics management firm Orion Energy Resources for S$7.2 million in shares. Singapore-incorporated Orion sources for coal from major traders and mine owners in Indonesia, and ships the commodity to power plants owned by a China-based state-owned enterprise.
The acquisition will benefit Sincap as it provides the group with opportunities to leverage Orion's resources, as well as for the group to grow revenues from mining and resources trading, Sincap said in an announcement on Thursday.
Sincap will issue 133 million new shares at 5.4 Singapore cents each, representing a discount of 9 per cent to the volume-weighted average price of shares traded on June 29.
In addition, assuming Orion achieves certain profit targets, Sincap would issue additional shares up to a maximum of 128.9 million shares. Including these additional shares, the total number of shares to be issued and allotted would amount to 42.47 per cent of Sincap's enlarged share capital.