Cityspring Infrastructure Trust

(19-11-2014, 07:43 AM)Stephen Wrote:

(19-11-2014, 07:40 AM)greengiraffe Wrote: Its the best deal for 2 ITE cos...

Basically, when they cannot convinced existing holders, they merged and confused existing holders further via a bigger platform, raised cash to buy a new asset.

Key considerations here - how attractive are the existing assets and the incoming assets...

The main benefit here is the cash infusion with a new asset with lower debts and immediate accretion to DPU...

Vested
CS

What it seems to me:
CIT+KIT only - Cityspring shareholder benefits
CIT+KIT+KMC - Both shareholder benefits

Vested in both

#1 CIT+KIT only - Cityspring shareholder benefits


#2 CIT+KIT+KMC - Both shareholder benefits

If KIT is benefiting CIT holders in case of #1, both Keppel by divesting an asset and potential new equity subscribers would pay for #2...

Divested CIT recently and not vested in KIT

(19-11-2014, 07:32 AM)Stephen Wrote: Notice for Keppel Infras slides page 15, there is no mention of DPU for Cityspring+KIT(no KMC acquisition).
They only show DPU for Cityspring+KIT+KMC. Why?

Well.. I suppose it does not look good on KIT. I would not put it in too if I am in the same shoes.
And to maintain the same yield for current KIT shareholders, they have to inject KMC into the trust.

Quite an unexpected twist of fate for CS shareholders.

(19-11-2014, 08:33 AM)yeokiwi Wrote:

(19-11-2014, 07:32 AM)Stephen Wrote: Notice for Keppel Infras slides page 15, there is no mention of DPU for Cityspring+KIT(no KMC acquisition).
They only show DPU for Cityspring+KIT+KMC. Why?

Well.. I suppose it does not look good on KIT. I would not put it in too if I am in the same shoes.
And to maintain the same yield for current KIT shareholders, they have to inject KMC into the trust.

Quite an unexpected twist of fate for CS shareholders.

I think eventually, KMC will be injected into the trust and it is a win win for everybody as DPU for KIT does still rise( not maintain the same yield as you mentioned) if KMC is injected. It will rise from 7.82 to 7.86-7.98 DPU for KIT. No reason not to be injected.

Other qualitative benefits as mentioned:
Larger trust which could possibly be part of an index, enhanced liquidity and better loan deal negotiation, lesser management fees (cost savings of $3.6m as written in slides)

I hope they are not following the profit sharing component of CIT. lose money also can get profit sharing if outperform benchmark.


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(19-11-2014, 10:08 AM)opmi Wrote: I hope they are not following the profit sharing component of CIT. lose money also can get profit sharing if outperform benchmark.


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On pg 5,
http://infopub.sgx.com/FileOpen/Slides-P...eID=325201

Trustee-manager fee structure of KFIM have been adopted for the Combined entity instead of CIT's fee structure.

Is KFIM fee structure better than CIT fee structure?

This arrangement is very clearly a takeover of CIT by KIT, with the combined entity to be named KIT, while KI/KIFM will be sponsor/trustee-manager.

Nonetheless, the story is (1) CIT to accquire KIT by issuing XXX new units, (2) Combined entity will change name to KIT --> I just wonder, is there any reason for the difference in how the story is told vs how things actually are (takeover of CIT) ?

How much trust do we place in Business Trusts...

Like all investments - value must be fundamentally driven

This is a combination of 2 ITE trusts that is govt linked.

For long time, there are plenty of difficulties to make accretive acquistions...

So now they combine to be a larger entity and simultaneously bolt on another mega acquisitions.

Seriously one should be asking... is there real deals for holders in Sing based govt privatisations bearing in mind that Singapore government is well off that they can always embark on projects on their own.

This is unlike angmo governments that have barrels pointing on their head after they are caught with big holes in their pockets due to social safety nets and etc...

Vested
CS

(19-11-2014, 05:46 PM)weijian Wrote: This arrangement is very clearly a takeover of CIT by KIT, with the combined entity to be named KIT, while KI/KIFM will be sponsor/trustee-manager.

Nonetheless, the story is (1) CIT to accquire KIT by issuing XXX new units, (2) Combined entity will change name to KIT --> I just wonder, is there any reason for the difference in how the story is told vs how things actually are (takeover of CIT) ?

(19-11-2014, 05:46 PM)weijian Wrote: This arrangement is very clearly a takeover of CIT by KIT, with the combined entity to be named KIT, while KI/KIFM will be sponsor/trustee-manager.

Nonetheless, the story is (1) CIT to accquire KIT by issuing XXX new units, (2) Combined entity will change name to KIT --> I just wonder, is there any reason for the difference in how the story is told vs how things actually are (takeover of CIT) ?

Lower yield fund acquiring a higher yield fund sounds more normal since it is an accretive acquisition.
KIT shareholders will be fuming if KIT is acquiring CIT and results in a drop in yield.

Although in actual fact, KIT is in the driver seat.

The current price is 54cts and CIT shareholders will get one-off distribution of 0.0303 cts in all. So, currently, the investors are paying 51cts for 3.67cts dividend. The yield is 7.2%. Not too bad for an infra fund.

(20-11-2014, 07:14 AM)yeokiwi Wrote:

(19-11-2014, 05:46 PM)weijian Wrote: This arrangement is very clearly a takeover of CIT by KIT, with the combined entity to be named KIT, while KI/KIFM will be sponsor/trustee-manager.

Nonetheless, the story is (1) CIT to accquire KIT by issuing XXX new units, (2) Combined entity will change name to KIT --> I just wonder, is there any reason for the difference in how the story is told vs how things actually are (takeover of CIT) ?

Lower yield fund acquiring a higher yield fund sounds more normal since it is an accretive acquisition.
KIT shareholders will be fuming if KIT is acquiring CIT and results in a drop in yield.

Although in actual fact, KIT is in the driver seat.

The current price is 54cts and CIT shareholders will get one-off distribution of 0.0303 cts in all. So, currently, the investors are paying 51cts for 3.67cts dividend. The yield is 7.2%. Not too bad for an infra fund.

On paper, it is a one-off accretive and related party transaction.

Going forward, it will be important to see if it can continue to do so and if there are sufficient pipeline from sponsors. Sponsors may include Sembcorp Ind since SCI is more active with infrastructure as its core.

Having said all that, on a global basis most of the lucrative non-toll road infrastructure projects have gone the Private Equity route ever since Macquarie Bank has delisted its highly reputed infrastructure vehicles post GFC.

CS appears to be a vehicle of yester-bubble when infrastructure trusts were the fad at the peak of last bullrun.

GG

(20-11-2014, 07:48 AM)greengiraffe Wrote:

(20-11-2014, 07:14 AM)yeokiwi Wrote:

(19-11-2014, 05:46 PM)weijian Wrote: This arrangement is very clearly a takeover of CIT by KIT, with the combined entity to be named KIT, while KI/KIFM will be sponsor/trustee-manager.

Nonetheless, the story is (1) CIT to accquire KIT by issuing XXX new units, (2) Combined entity will change name to KIT --> I just wonder, is there any reason for the difference in how the story is told vs how things actually are (takeover of CIT) ?

Lower yield fund acquiring a higher yield fund sounds more normal since it is an accretive acquisition.
KIT shareholders will be fuming if KIT is acquiring CIT and results in a drop in yield.

Although in actual fact, KIT is in the driver seat.

The current price is 54cts and CIT shareholders will get one-off distribution of 0.0303 cts in all. So, currently, the investors are paying 51cts for 3.67cts dividend. The yield is 7.2%. Not too bad for an infra fund.

On paper, it is a one-off accretive and related party transaction.

Going forward, it will be important to see if it can continue to do so and if there are sufficient pipeline from sponsors. Sponsors may include Sembcorp Ind since SCI is more active with infrastructure as its core.

Having said all that, on a global basis most of the lucrative non-toll road infrastructure projects have gone the Private Equity route ever since Macquarie Bank has delisted its highly reputed infrastructure vehicles post GFC.

CS appears to be a vehicle of yester-bubble when infrastructure trusts were the fad at the peak of last bullrun.

GG

In the news recently last month or so, there was something about Singapore becoming the center of excellence for ASEAN infrastructure fund.

Makes me wonder is there any connection.

Edit: its Asian Infrastructure Investment Bank news on channelnesasia on 5 Nov 2014. Go google. Where I read that singapore is the Center of excellence . ( using xiaomu can't paste link here don't know how)