http://www.businesstimes.com.sg/sub/...01591,00.html?
Published August 28, 2010
GuocoLand back in black, makes $532m rights issue
It also says buyer of Shanghai office block has asked to delay deal
By KALPANA RASHIWALA
(Singapore)
GUOCOLAND, which returned to the black and announced a $532 million rights issue yesterday, revealed that the Chinese party which inked a one billion yuan deal to buy a Shanghai office block from the group last November has asked for a deferral of completion and payment of the balance sale price till end-2011.
So far, the buyer has paid GuocoLand 97.6 million yuan (S$19.5 million) or about 10 per cent of the purchase price. The 24-storey office tower is being built on a 50-year leasehold site under Guoson Centre Changfeng's first phase, which will be completed by end-2010.
The first phase also includes a hotel - which has begun operations - and a mall. The sale of the office tower to Shanghai Putuo District State Asset Management Co was announced last November.
For the fourth quarter ended June 2010, GuocoLand posted net profit of $51.98 million, reversing the $73.1 million net loss in the same year-ago period. The bottomline improvement was helped by the absence of a revaluation loss on investment properties. Revenue rose 19 per cent year-on-year to $165.8 million. Gross profit rose 164 per cent to $71.2 million.
Profit for the latest quarter was contributed mainly from China and Singapore projects - namely Ascot Park in Nanjing, West End Point in Beijing, Changfeng SOHO in Shanghai and Goodwood Residence in Singapore.
GuocoLand also posted a full-year net profit of $134.3 million - against a net loss of $70.2 million in the previous year, when it had booked $80.9 million revaluation loss and $34.3 million net forex loss.
Gross profit doubled from $113.5 million for the year ended June 2009 to $245.4 million for FY ended June 2010 due mainly to recognition of profit from strong sales in China.
Ascot Park in Nanjing - a Balinese themed development with 1,112 apartments located east of the scenic Purple Mountains - is fully sold.
The group has also sold 81 per cent of the SOHO units in Guoson Centre Changfeng in Shanghai. GuocoLand China accounted for 78 per cent of full-year group profit before income tax.
'Singapore also recorded robust sales in the launches of residential developments such as Sophia Residence, Elliot at the East Coast and Goodwood Residence,' the group said.
Giving an update on its residential development in Tianjin, GuocoLand said the 120 units launched at Seasons Park in June have been fully sold.
The group reiterated that various legal actions it has taken to defend and protect its 90 per cent interest in the Dongzhimen project in Beijing are still pending hearing and/or adjudication before Chinese courts.
It also revealed that in Vietnam, the conditional joint venture agreement it inked with ECC VNPI Pte Ltd to develop a mall on The Canary in Binh Duong Province has been terminated as certain conditions have not been met.
Shareholders will be paid an eight-cent per share first and final dividend, up from five cents in the previous year.
The group posted Q4 earnings per share of 6.25 cents, compared with a loss per share of 8.90 cents in the same year-ago period. Full year EPS was 16.18 cents, against loss per share of 8.55 cents previously.
GuocoLand is also proposing a renounceable, one-for-three rights issue of about 295.84 million ordinary shares at $1.80 apiece.
The price reflects a 15.9 per cent discount to the counter's last traded price of $2.14 on Thursday. Trading in GuocoLand was suspended yesterday and will resume on Monday.
The rights issue is effectively underwritten by GuocoLand's Hong Kong-listed parent, Guoco Group Limited (GGL). GGL - which controls 65.24 per cent of GuocoLand - has undertaken to take up its pro-rata entitlement of the rights shares and mop up any excess rights shares not subscribed by other shareholders.
GuocoLand said the capital raising will strengthen its balance sheet, enhance its financial flexibility and enable it to pursue attractive opportunities in the countries it operates.
As at June 30, 2010, the group's gearing was 0.97 time and net tangible assets per share $2.42.
After adjusting for the estimated net proceeds of about $532 million, proforma gearing is expected to improve to 0.58 time and NTA per share decrease to $2.26.
The rights issue requires shareholders' nod but is practically a done deal as GGL has undertaken to vote in favour of it.
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