Singapore GIC eyes bigger stake in Aussie property firm
By Grace Ng
THE Government of Singapore Investment Corporation (GIC) has reportedly agreed to invest up to A$700 million (S$702 million) in an Australian property company.
GIC’s real estate arm said that it has invested in GPT, and sees this partnership with the Sydney-based real estate investment trust as ‘a good fit…and an important part of (its) investment strategy in Australia’.
In a statement yesterday, GIC Real Estate said that it will pump money into GPT through two ways - buying convertible preferred securities and participation in a rights issue.
‘This will give us appropriate downside protection as well as the opportunity for upside in capital appreciation,’ said GIC Real Estate. The Singapore group, which holds 2.2 per cent of GPT, did not state how much more it will invest in the property firm.
But GPT stated yesterday that GIC will emerge with a total stake of between 12 and 18 per cent of GPT following its rights issue. This will make GIC the largest shareholder in the company.
GPT said GIC will take up its A$250 million exchangeable securities. GIC has also agreed to help underwrite 504 million securities in a rights issue to retail investors, which is expected to raise about A$300 million. GIC will also participate in a rights issue to institutional investors which may raise A$1 billion.
Cash from the rights offer will be used to repay the debt of GPT, which reported a half-year loss of A$68 million.
GIC noted that it ‘has been a long-term investor in Australia’, and has ‘always believed in the fundamentals of the Australian economy and its property sector’. It is believed to have invested well over A$3 billion in Australian real estate, including Sydney’s Queen Victoria Building and the Strand Arcade.
Meanwhile, Temasek Holdings is reportedly ‘exploring options’ on its nearly 70 per cent stake in Singapore Food Industries (SFI), a manufacturer and distributor.
Bloomberg quoted Mr David Heng, Temasek’s managing director of investments, as saying that ‘as an active investor, Temasek reviews its portfolio regularly’.
‘We are exploring options with regard to our stake in SFI, with the aim of unlocking shareholder value and optimising returns,’ he said, adding that no decision on the stake has been made.
SFI’s shares rose two cents to close at 82 cents yesterday.
Source : Straits Times - 24 Oct 2008
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