Kudos To CapitaLand
You gotta hand it to the folks at CapitaLand: when it comes to getting a good deal they don’t let anything stand in their way – even if they are both buyer and seller.
Raffles Holdings’ sale of the Raffles City shopping centre, office block and hotel was done at a price that is likely to keep everyone happy:
Raffles Holdings gets S$435.1 million for its 45% share in Tincel Properties (Private) Limited, the company that owns Raffles City. The junior bond holders in Tincel, which own the other 55% are likely to get the rest.
Combined with the almost S$594 million in cash and equivalents on the balance sheet at the end of calendar 2005, a payout of more than S$1 billion awaits.
The buyers of Raffles City – CapitaCommercial Trust and CapitaMall Trust – are also part of the CapitaLand stable, but that didn’t mean they got a free kick.
Paying S$2.085 billion – plus another S$81 million in development costs – for an asset that Raffles Holdings said on February 11 this year was on the books at S$1.62 billion is a pretty good deal.
The two REITs, who are yet to get shareholder approval for the deal, will still pick up Raffles City at a yield around 5%.
Another positive about the CapitaLand group is its level of disclosure.
While some Government-Linked Companies meet their statutory requirements but are otherwise at best reticent to disclose useful information, CapitaLand communicates considerably more with its shareholders.
For example, the announcement of the Raffles City sale was made on Sunday afternoon, giving the media enough time to include the story in the Monday morning papers.
Each CapitaLand entity made its own separate announcement, rather than a one-statement-fits all approach.
And Raffles Holdings, after a newspaper story hinting that a Raffles City sale was imminent, disclosed February 11 that it was leaning towards a sale.
That’s certainly an improvement on the common but useless “we don’t comment on market rumour” line.
So, who do YOU think got the best deal?
The REITs? Raffles Holdings? Or CapitaLand.
I look forward to your comments.
ArchivesRaffles Holdings’ sale of the Raffles City shopping centre, office block and hotel was done at a price that is likely to keep everyone happy:
Raffles Holdings gets S$435.1 million for its 45% share in Tincel Properties (Private) Limited, the company that owns Raffles City. The junior bond holders in Tincel, which own the other 55% are likely to get the rest.
Combined with the almost S$594 million in cash and equivalents on the balance sheet at the end of calendar 2005, a payout of more than S$1 billion awaits.
The buyers of Raffles City – CapitaCommercial Trust and CapitaMall Trust – are also part of the CapitaLand stable, but that didn’t mean they got a free kick.
Paying S$2.085 billion – plus another S$81 million in development costs – for an asset that Raffles Holdings said on February 11 this year was on the books at S$1.62 billion is a pretty good deal.
The two REITs, who are yet to get shareholder approval for the deal, will still pick up Raffles City at a yield around 5%.
Another positive about the CapitaLand group is its level of disclosure.
While some Government-Linked Companies meet their statutory requirements but are otherwise at best reticent to disclose useful information, CapitaLand communicates considerably more with its shareholders.
For example, the announcement of the Raffles City sale was made on Sunday afternoon, giving the media enough time to include the story in the Monday morning papers.
Each CapitaLand entity made its own separate announcement, rather than a one-statement-fits all approach.
And Raffles Holdings, after a newspaper story hinting that a Raffles City sale was imminent, disclosed February 11 that it was leaning towards a sale.
That’s certainly an improvement on the common but useless “we don’t comment on market rumour” line.
So, who do YOU think got the best deal?
The REITs? Raffles Holdings? Or CapitaLand.
I look forward to your comments.
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