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CapitaLand answers A$281.6m cash call

Posted on 28 Jul 2009 | Comments Off

CapitaLand will inject A$281.6 million (S$333.1 million) into Australand by taking up its full entitlement in the Australian property unit’s A$475 million rights issue.

Sydney-based Australand – which yesterday posted a first-half net loss of A$268.8 million – says the proceeds will strengthen its balance sheet amid a challenging second half. It is the company’s second rights issue in about a year.

The exercise will ‘provide additional headroom against the covenant limits of Australand’s debt facilities, sufficient liquidity to meet all anticipated funding requirements over the next two years and (to) take advantage of selective opportunities in a disciplined manner’, Australand said.

To raise A$475 million – comprising A$380 million from an institutional tranche and A$95 million from a retail tranche – Australand is making a seven-for-10 non-renounceable pro-rata entitlement offer of new stapled securities at A$0.40 apiece. The offer price is a 20 per cent discount to the last closing price of A$0.50 on July 24.

CapitaLand, which has a 59.27 per cent stake in Australand, will take up its full entitlement for A$281.6 million cash. It does not expect its subscription or the rights issue to materially affect its net tangible assets per share or earnings per share for the financial year ending Dec 31. Its effective interest in Australand should stay the same. Continue reading →

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Posted in Developers

Tagged Developers, Singapore Property Market, Singapore Real Estate

CapitaLand in spotlight

Posted on 27 Jul 2009 | Comments Off

THE resurgence of the residential market had been capturing headlines lately, and this has energised interest in property counters.

For traders, one way to place huge bets on the reviving property market is to load up on the covered warrants issued on giant developers.

In particular, some are focusing on CapitaLand, which is releasing its half-year results on Thursday.

For those who believe there is more upside in CapitaLand, Macquarie Bank has a call warrant which gives its holder the option until November to buy into the stock at $3.80. This warrant is ‘in the money’ as its strike price is well below CapitaLand’s current price. Last Friday, the counter had ended eight cents higher at $3.97, taking its total gains over the past two weeks to 17.1 per cent.

Thus, any upward movement in CapitaLand’s price is likely to be accompanied by a similar gain in the warrant price.

For those who believe the counter may be ripe for a correction, after its rally in the past two weeks, Macquarie Bank has a put warrant where a holder is given the option until December to sell the stock at $3.70. In this case, any fall in CapitaLand’s price is likely to be accompanied by a gain in the warrant’s price.

Still, it may be worth noting that property analysts have been turning more bullish on the stock.

CLSA recently raised its target price on CapitaLand from $3.65 to $4 to take into consideration any upside the developer might get from its new residential land-bank acquisition.

‘While it is obvious the company has missed its first-quarter bottom prices for asset acquisition, we believe China still presents the company with a better avenue to access growth, when compared to Singapore,’ it said.

Source : Straits Times – 27 Jul 2009