The growing interest in Parkson Holdings Bhd from the Government of Singapore Investment Corp Pte Ltd (GIC) could spell good things for the former’s shareholders, in light of the proposed listing of its Asean retail arm, Parkson Retail Asia Pte Ltd (Parkson Asia).
GIC had been actively purchasing shares of Parkson Holdings, increasing its interests to 55.72 million shares or 5.09% as of early Sept 2011 after emerging as a substantial shareholder with a 5% stake or 55.03 million shares on Aug 24 2011, just eight days after Parkson Holdings announced its intention to list Parkson Asia.
The proposed listing could obviously unlock the value of Parkson Asia and fund its future growth.
The proposed listing of Parkson Asia came at a time where parent Lion Group is in need of funds to resume the construction of its RM3.2 billion blast furnace project, which is critical to make its steel operation competitive in light of the infiltration of cheap imports.
The question is whether part of the proceeds from Parkson Asia’s IPO would be channelled to the Lion Group’s steel project. But GIC’s interest in Parkson Holdings signals a potential value inherent in the exercise to take Parkson Asia public.
To recap, Parkson Holdings announced its proposal to list its 90.1%-owned unit Parkson Asia on the main board of the Singapore stock exchange by the end of 2011. Indonesia’s PT Mitra Samaya owns the remaining 9.9% equity interest in Parkson Asia.
Parkson Asia’s net asset as at June 30, 2010 amounted to some S$140.3 million (RM346.28 million). This includes its 36 Parkson-branded stores in Malaysia, seven Parkson-branded stores in Vietnam as well as five Centro-branded stores and one Kem Chicks-branded gourmet supermarket in Indonesia.
Although the amount of proceeds to be raised from Parkson Asia’s IPO was not made known, news reports indicated that it could amount to as much as S$500 million.
Going forward, a lot depends on how the proceeds are used. Another thing is that Parkson Holdings could see smaller earnings contribution from Parkson Asia once it is listed because of its reduced shareholding too.GIC had been actively purchasing shares of Parkson Holdings, increasing its interests to 55.72 million shares or 5.09% as of early Sept 2011 after emerging as a substantial shareholder with a 5% stake or 55.03 million shares on Aug 24 2011, just eight days after Parkson Holdings announced its intention to list Parkson Asia.
The proposed listing could obviously unlock the value of Parkson Asia and fund its future growth.
The proposed listing of Parkson Asia came at a time where parent Lion Group is in need of funds to resume the construction of its RM3.2 billion blast furnace project, which is critical to make its steel operation competitive in light of the infiltration of cheap imports.
The question is whether part of the proceeds from Parkson Asia’s IPO would be channelled to the Lion Group’s steel project. But GIC’s interest in Parkson Holdings signals a potential value inherent in the exercise to take Parkson Asia public.
To recap, Parkson Holdings announced its proposal to list its 90.1%-owned unit Parkson Asia on the main board of the Singapore stock exchange by the end of 2011. Indonesia’s PT Mitra Samaya owns the remaining 9.9% equity interest in Parkson Asia.
Parkson Asia’s net asset as at June 30, 2010 amounted to some S$140.3 million (RM346.28 million). This includes its 36 Parkson-branded stores in Malaysia, seven Parkson-branded stores in Vietnam as well as five Centro-branded stores and one Kem Chicks-branded gourmet supermarket in Indonesia.
Although the amount of proceeds to be raised from Parkson Asia’s IPO was not made known, news reports indicated that it could amount to as much as S$500 million.
Parkson Asia is expected to contribute about 15% of Parkson’s FY12 ending June 30 earnings, with the rest contributed by its China retail arm Parkson Retail Group Ltd, which is listed in Hong Kong.
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