Published 11 February 2009
Listed Singapore property giant CapitaLand Ltd announced a substantially lower profit and launched 2 heavily discounted rights issues on Monday for a total $S3.07 billion.
One issue of $S1.84 billion is for the head company and the other, an $S1.23 billion issue, is for a subsidiary, the CapitaMall Trust.
The 1:2 CapitaLand issue is priced at $S1.30, compared to NTA of $S3.57.
Group president & chief executive Liew Mun Leong spoke of a strong 2008 performance – the third consecutive profit over $S1 billion, second-highest profit after tax & before minority interests – but the result was well down on 2007’s bumper earnings.
Mr Liew highlighted assets under management up 46% to $S25.9 billion, fund management fees up 53% to $S182 million and property management fees up 16% to $S231 million. But revenue fell 27.4% to $S2.75 billion, ebit 42.1% to $S2.2 billion, profit after tax & minority interests (patmi) 54.3% to $S1.26 billion, patmi excluding fair-value gains 39.1% to $S1 billion, earnings/share 54.7% to S44.7c. NTA rose by 1.1% to $S3.57/share – highlighting the discount at which the rights issue is being made.
The mall trust issue price of S82c/share represents a 43.4% discount on last Friday’s closing price of $S1.45/unit, 49.1% on the $S1.61/unit 30-day volume-weighted average price immediately preceding 9 February, 28.7% on the theoretical ex-rights price of $S1.15/unit.
CapitaLand Ltd will at least maintain its 29.7% interest in the trust, and the Government-controlled investment entity, Temasek, said it would take up its rights in CapitaLand. It has direct & deemed interests of 41.5% of CapitaLand.
Mr Liew said the CapitaLand issue was to strengthen its balance sheet, especially to take advantage of opportunities in the global downturn – 60% of CapitaLand’s 2008 profit came from outside Singapore.
The trust issue is principally to repay $S956 million of borrowings due in May & August, the balance for general corporate & working capital purposes. The issue will cut the trust’s aggregate leverage from 43.2% in December to 29.1%. The trust will hold an extraordinary meeting on Monday 2 March to approve its issue.
Attribution: Company releases, presentation, results, story written by Bob Dey for the Bob Dey Property Report.