Stocks to watch: Thakral Corp, Fu Yu, IHH Healthcare
Thakral Corp : The mainboard-listed company on Tuesday announced the launch of an initial public offering (IPO) of GemLife Communities, an Australian over-50s lifestyle resort operator, to raise up to A$750 million (S$628.2 million) at an implied post-money valuation of A$1.58 billion. It is fully underwritten by JPMorgan and Morgan Stanley in Australia, noted Thakral, which holds a 31.7 per cent effective interest in GemLife. Thakral intends to subscribe for an additional 600,962 GemLife stapled securities at the IPO price of A$4.16 per stapled security, translating to a total of 64,000,962 GemLife stapled securities. Its shares closed 2 per cent or S$0.03 lower at S$1.44 on Tuesday, before the news.
Fu Yu : The components manufacturer on Tuesday said that it is actively seeking to appoint independent non-executive directors and has reached out to the Singapore Institute of Directors to invite suitable candidates to apply. This comes as all its independent directors resigned from the company's board recently. It added that it has agreed to table resolutions for the removal and appointment of directors, in response to its largest shareholder's request for it to do so under section 183 of the Companies Act 1967, having received legal advice that the request is valid and must be acted upon. The counter ended on Tuesday 5.3 per cent or S$0.005 lower at S$0.09.
IHH Healthcare: Insurer Great Eastern (GE) has temporarily suspended pre-authorisation certificates for IHH Healthcare's Mount Elizabeth Hospitals from Tuesday, due to high costs from Mount Elizabeth and Mount Elizabeth Novena hospitals, compared to other private hospitals. The suspension however will not affect other IHH hospitals and facilities such as Gleneagles and Parkway East. GE customers can still seek care from Mount Elizabeth and Mount Elizabeth Novena, but will have no pre-authorisation facility, with no change to their benefits and claims assessed as usual. Shares of IHH Healthcare closed flat at S$2.07 on Tuesday.
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Business Times
11 hours ago
- Business Times
S&P downgrades SingPost's credit rating to ‘BBB-' on downscaling, subdued operating conditions
[SINGAPORE] S&P Global Ratings on Friday (Jul 25) downgraded its long-term issuer credit rating on Singapore Post (SingPost) to 'BBB-' from 'BBB', as it has scaled down with the sale of its Australian logistics and freight forwarding businesses. Its core business also continues to face subdued operating conditions. But S&P added: 'The stable outlook reflects our expectation that SingPost will approach investments prudently, and manage the structural decline in the postal industry.' A 'BBB' rating by S&P means that the company has adequate capacity to meet its financial commitments, but is more subject to adverse economic conditions. 'BBB-' is the lowest grade that an investment-grade company can receive, and is just above a junk bond rating. The credit rating agency also lowered its issue rating on the Singapore dollar S$250 million subordinated perpetual securities that the company guarantees to 'BB' from 'BB+'. The latest downgrades came two years after S&P downgraded SingPost's long-term issuer credit rating to 'BBB' from 'BBB+', on potentially longer-than-expected weakness in its post and parcel segment. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up In its latest report, S&P said it sees the sale of SingPost's Australian logistics business Freight Management Holdings in March 2025 to be transformative, 'representing a significant pivot from the company's earlier strategy to establish Australia as a second home base'. The Australia business accounted for about 50 per cent of operating profits from continuing and discontinued operations in the 2025 fiscal year ended Mar 31, it noted. S&P also flagged the sale of SingPost's freight-forwarding business conducted through Famous Holdings and Rotterdam Harbour Holding earlier this week, after identifying it as non-core. 'The loss of a key earnings pillar shifts the focus back to the postal and logistics business, which is facing structural and operating issues,' the agency said. 'It is also operating at significantly reduced scale and diversity.' The core business faces weak profitability amid persistent structural decline, high fixed operating costs, and rising competition in a highly fragmented market, it said. It added that the operating margin for SingPost's postal and logistics as well as international businesses was about 1 per cent in the 2025 fiscal year, against the post and parcel segment's 15 per cent in the 2020 fiscal year. The agency believes that SingPost's two divestments will have bolstered its cash position by about S$750 million. It is likely to deleverage, to manage its balance sheet, it said. It will also pay out a special dividend of S$202.5 million in the 2026 fiscal year. S&P believes that SingPost's leverage could increase from a net cash position through investment cycles. It said: 'The company has a track record of debt-fuelled expansion.' The credit rating agency has removed its ratings on the company from CreditWatch, where it had placed SingPost with negative implications on Dec 5 last year. Clouded but stable outlook S&P noted that SingPost is undergoing management changes, and said it will wait for clarity on its strategy. The frequent management turnover and strategy changes cloud the operating earnings outlook, it said, adding that the 'strategic backtracking' on the sale of the entire Australia business undermines 'the consistency and execution' of its stated strategy, to diversify away from the domestic business which is facing structural decline. 'In our view, SingPost has to demonstrate its ability to reposition itself in the postal and logistics business under the new management team,' it said, pointing to the constant and ongoing changes to the board and senior management. 'The CEO position has yet to be filled.' But S&P also noted that SingPost is in talks with the government to address the financial sustainability of postal services and the post office network. The agency said that its stable rating outlook on SingPost reflects its belief that the company will prudently pursue investments and manage its postal businesses' structural decline sustainably. But it may downgrade the rating if it expects SingPost's business competitiveness to further weaken, such as in the case where it cannot stop the decline of its postal and logistics core business, or earnings diversity reduces further. A downgrade could also occur if its earnings deteriorate due to competitive pressures, or it chooses an aggressive growth strategy that causes debt to increase materially more than expected. 'A ratio of debt-to-Ebitda (earnings before interest, taxes, depreciation and amortisation) of above 2.5x will reflect such deterioration,' it said. On the other hand, an upgrade could be due if SingPost 'demonstrates a sustained track record of improving profitability across its core postal and logistics business, while maintaining earnings diversity and a conservative balance sheet position'. SingPost shares closed at S$0.63, up S$0.005 or 0.8 per cent higher on Friday, shortly after the report was released.
Business Times
12 hours ago
- Business Times
Brookfield's new real estate head sees return of mega deals
[NEW YORK] After three-years of anemic transaction volumes, large real estate deals are making a comeback, according to Lowell Baron, the new chief executive officer of Brookfield Asset Management's real estate business. The alternative asset manager has sold US$13 billion of property already this year, including major deals in the US, Spain and Australia, in a sign that liquidity is returning even for larger portfolios. That was up from US$3 billion in the first half of last year and just US$2 billion in the first six months of 2023. The sales are crucial for private equity firms investing in real estate, which have struggled to dispose of assets and return capital to investors, meaning fundraising has fallen sharply as cash remains locked in older funds. 'We're edging back to a more normalised rate of transactions,' Baron said, in his first interview since assuming the role last month. 'Over the last couple of years, there has been a severe lack of liquidity in the market and there haven't been larger transactions trading.' The end of the low interest-rate era prompted buyers to seek higher returns from real estate while sellers clung to backward looking valuations. That created a stalemate in which deal volumes plumbed historic lows and made it hard for valuers to appraise prices, further delaying a recovery. The lack of sales has been a particular headache for private equity real estate fund managers, whose ability to raise capital has been hampered by investors' funds tied up in older vehicles that have yet to make disposals. Private real estate fundraising declined for its third straight year in 2024, with managers hauling in US$131.1 billion, less than half the 2021 peak, data compiled by PERE show. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up But there are signs the protracted period of inertia is coming to an end. US commercial real estate investment jumped 14 per cent in the first quarter compared to a year earlier when dealmaking was at its lowest in a decade with the exception of the lockdowns of 2020, data compiled by CBRE Group show. Brookfield, which manages about US$272 billion of real estate globally, has agreed to several sales this year, including an Australian retirement housing business, a Spanish student dorm owner and most recently Phoenix, Arizona-based Fundamental Income Properties, which is being acquired by Starwood Property Trust for US$2.2 billion. Grease the wheels Fundraising is also accelerating, with the firm mopping up US$5.9 billion for the fifth vintage of its flagship real estate fund in the first quarter, bringing the total to US$16 billion. 'When we were out talking to our partners, one of the reasons people were holding back is because they weren't getting capital back,' said Baron, a 20-year Brookfield veteran who replaced Brian Kingston atop the real estate business last month. With these disposals, 'we are returning a material amount of capital to our investors and I think it is going to grease the wheels and allow them to allocate to new funds,' he added. Still, the recovery remains uneven, with demand focused on sectors like data centres, rental housing and some logistics properties where there are shortages of supply and robust demand. But traditional mainstays of commercial real estate portfolios like office buildings face a more uncertain landscape, with demand concentrated on the limited amount of high quality new supply while vacancy rates remain elevated for older space. In London, Brookfield has restructured a loan secured against the CityPoint skyscraper to buy time to upgrade the building and fill empty space after failing to sell it for more than the outstanding value of debt secured against it. In Los Angeles, the firm has defaulted on loans secured against office towers and ceded control of the properties to its lenders. 'Capital isn't coming back across the board, which is creating a really interesting investing environment,' Baron said. 'For assets that aren't yet performing that well, that have more stories to them, we're not seeing capital come back. But for companies that are best in class, there's significant capital coming back.' Contrarian bets Brookfield made a series of contrarian bets in the aftermath of the pandemic – when questions about the work-from-home legacy were most prominent – acquiring a trio of European office landlords. That was a marked contrast from rival real estate giant Blackstone, which has talked up its minimal exposure to office properties in recent years. Uncertainty about future demand has limited new development, while major corporations led by Wall Street banks and tech giant have pushed hard to get workers back to the office. That's now setting up supply shortages in the best districts, forcing rents higher and prompting even previously bearish investors to weigh getting back in. 'For us right now, we will focus on the highest quality assets and over time it will widen out,' Baron said. 'We still see that bifurcation of the office market. There will be more stress to run through the system because there are large debt maturities that haven't come due and large leases that haven't rolled yet.' The slow feed-through of distress has compounded the lack of transactional activity, extending the longest period of dislocation in real estate markets since the aftermath of the global financial crisis. But for managers that have been able to raise capital, that extension has also created opportunity, Baron said. 'This moment in time continues to be elongated,' he said. 'The buying window is continuing because it takes time for capital to come back and get redeployed and in the meantime we are seeing investment opportunities with limited competition.' BLOOMBERG
New Paper
21 hours ago
- New Paper
SFA orders recall of Australian salami after salmonella detected
The Singapore Food Agency (SFA) has ordered a recall of a salami product after finding salmonella bacteria in it. Primo Reserve Hot Sopressa Salami is an Australian product imported by Alternative Selection, said the agency in a statement dated July 24. The company has been directed to remove the product from shelves and the recall is ongoing. Salmonella is a pathogenic bacterium that can cause food poisoning, and associated symptoms including diarrhoea, abdominal pain, fever, nausea and vomiting. Consumers who bought the product in question should not eat it, and those who have eaten it and have concerns about their health should seek medical advice, SFA added.
