http://www.businesstimes.com.sg/arch...perty-20130626

Published June 26, 2013

Courage Marine seeks nod to diversify into property

It will hold special general meeting to obtain shareholders' 'pre-approval'

By Lynn Kan


COURAGE Marine wants to seek refuge from the rough dry-bulk market, and enter Singapore and China's "upbeat" real estate markets.

It is holding a special general meeting on July 16 to seek shareholders' "pre-approval" and a "general mandate" to enter into subsequent property investments that would diversify its income base and reduce its dependence on volatile and depressed freight income.

While real estate may not seem an instinctive fit for the dry-bulk charterer, the Hong Kong-based board explained that as a transporter of sand, cement and gravel - raw materials for many construction projects - it has built up a network of contacts active in the building and construction industry.

"As a result, the group is often approached with offers or opportunities for investment or joint ventures in real estate . . . by such parties," the board said in a filing to the Singapore Exchange.

The group is most interested in new residential, commercial, warehousing or mixed-use projects here and in China, including Hong Kong and Macau.

The board believes that, over the mid- to long-term, Singapore's residential property market in the luxury high-end and mass-market sectors would remain "upbeat".

Similarly, in China, demand for housing by urban residents is rising, and individual and corporate investment in property is being encouraged, said the directors in the filing.

The group will, however, take certain safeguards to limit its financial exposure to an area in which it does not have core competencies.

For instance, it will restrict its stake to under 50 per cent of the development or project's total shareholding or equity, and seek out investments that give a return on investment or capital within three to five years.

At the upcoming special general meeting, Courage Marine shareholders will also vote on subsidiary Courage Marine Overseas' 10 per cent equity stake in Santarli Realty, the joint venture company behind the Sant Ritz condominium near Potong Pasir MRT station.

The 214-unit Sant Ritz condominium project at 1 Pheng Geck Avenue is due for completion at the end of 2015.

Courage Marine told BT that it will commit $5.4 million or 10 per cent of the $54 million shareholders' loan to Santarli Realty and a further $100,000 to purchase 100,000 ordinary shares at $1 each from Santarli Corp.

After the transaction, Santarli Corporation will be the 60 per cent majority shareholder in Santarli Realty, with the remaining 40 per cent split equally among Courage Marine's wholly owned subsidiary CM Overseas, Excel Precast, Transview, and Hsiangkang Enterprise Corporation.

Courage Marine fell 0.3 cents to 6.7 cents yesterday.