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Headliners | 21 November 2008
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By: David Lee
Articles (57) Profile

Straits Asia Obtains US$300m Loan From Standard Chartered

Straits Asia Resources, which owns two coal mines in Indonesia, has secured a US$300m loan from Standard Chartered Bank. As part of the deal, the company needs to issue to the bank 35m warrants for new shares with an exercise price of $1.095. The new 18-month facility will be used to refinance an existing US$230m bridging facility and provide funds for capital expansion.

The company recently reported net profit of US$28.4m on sales of US$168.9m. The company is confident that its margins can be protected going forward, even though spot prices of thermal coal in Australia, a benchmark for Asia, have fallen below US$100 a tonne from peaks of US$200 in July. CEO Richard Ong reasoned that the company has a policy of selling just 15% of production at spot prices. He added that the company has five-year contracts to deliver tonnage, but it locks in the price one year in advance. The company has a substantial war chest of US$87.4m in cash as at 30 September 2008 and is committed to paying out 60% of profit as dividend. Last quarter, it announced a second interim dividend of US$0.0155 a share, on top of an earlier payout of US$0.031 paid in September.

SPH Inks $150m Loan Facilities With OCBC And DBS

Singapore Press Holdings (SPH) has signed agreements with DBS and OCBC for unsecured term loan facilities totalling $150m for a tenure of 3 years. The loans will be used for working capital and general corporate funding purposes. This is likely to include the upcoming payment of the proposed final tax-exempt dividend of $0.19 a share for FY08 ended August 31.

Although the company has an investment portfolio of about $1b, it is unlikely to sell some assets for cash in these uncertain times, when current market pricing are low due to the financial turmoil. Market observers say the company’s ability to secure term loans under such tight credit conditions is a sign that its finances are seen to be in good shape. In particular, the media company secured the loan facilities on unsecured terms.

Government Budget Deficit To Overshoot Estimates

The Singapore government is likely to end the current fiscal year with a budget deficit of more than three times the $800m first projected, as it has stepped up spending to shield the economy from the global downturn that has pushed Singapore into recession. Finance Minister Tharman Shanmugaratnam cited the high cost factors in infrastructural projects, additional spending on the new and enhanced Marriage and Parenthood measures and higher payouts from the enhancements in the Growth Dividends and U-Save rebates as the main reasons why the deficit would be higher. There may also be some dampening of revenues in view of the lower-than-expected economic growth and more subdued property transactions, especially in the last two quarters of the fiscal year.

He also added that the government would share risks with banks to ensure that small and medium enterprises continues to have access to credit. Announcements would be made by the government soon on related enhanced loans schemes.

JP Morgan Sells $21.9m Stake In Olam

JP Morgan Chase & Co has reduced its interest in commodity supplier, Olam International from 7.96% to 6.96% as a result of the market sale of 17.1m shares by JP Morgan & Chase on 12 November. Based on Olam’s closing share price of $1.28 on that day, the value of the transaction was $21.9m. Olam was one of the victims of a massive sell-down last month, with volatile commodity prices dragging its market capitalisation down 30% to $2.2b. Its share price has since rebounded on strong profits reported in its 1Q09 results ended 30 September 2008.

For its 1Q09 results, Olam reported a 62% jump in net profit to $14.9m. This was attributed to strong results from its four business segments. Sales for its first quarter grew 24.6% to $1.72b while earnings per share soared 47% to $0.0087.

Olam Int'l  1.810 -- --   
Business: Co is engaged in sourcing, processing, packaging and merchandising agricultural products. [FY18 Turnover] Food staples & packaged foods (47.6%), confectionery & beverage ingredients (23.4%), industrial raw materials, infrastructure & logistics (14.9%), edible nuts & spices (14.1%).

Insight: May-19, 1Q19 revenue rose 16.7% due to increased t... Read More
Oversea-Chinese Banking Corp  10.850 -0.01 -0.09%   
Business: [FY18 Turnover] Global corporate/investment banking (35%), global consumer/private banking (34.8%), OCBC Wing Hang (11.5%), insurance (11%), global treasury & mkts (7.7%).

Insight: May-19, 1Q19 total income rose 14.7% driven by str... Read More
DBS Group Hldgs  24.940 -0.11 -0.44%   
Business: [FY18 Total Income] Institutional banking (43.7%), consumer banking/wealth management (42.9%), treasury markets and others (13.4%).

Insight: Apr-19, 1Q19 net profit rose 9% to a record $1.7b.... Read More
Singapore Press Hldgs  2.130 -0.03 -1.39%   
Business: Co is S'pore's main newspaper & magazines publisher that also has investment in properties. [FY18 Turnover] Media (66.7%), property (24.7%), others (8.6%).

Insight: Apr-19, 1H19 operating revenue fell 3% to $477.6m ... Read More

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