Lee Kim Tah Holdings

Together with its original and equal development partner Guthrie GTS for Jurong Point (JP1 + JP2), LKT has bought out their 50% German partner (TMW GmbH) in JP2 for approx. S$229.0m - based on an agreed value of $670.0m for JP2, equivalent to approx. 2,133 psf (based on JP2's total lettable floor area of 314,123sf).....
http://info.sgx.com/webcoranncatth.nsf/V...F003394EB/$file/Prime_Point.pdf?openelement

Henceforth, LKT and Guthrie will jointly and equally (i.e. 50/50) own the entire Jurong Point. This transaction is earning/EPS accretive and will also raise NAV for both LKT and Guthrie.

Controlling shareholder Lee Family through their private investment company Lee Kim Tah Investments Pte Ltd has resumed buying shares from the open-market on 1Jul11 by adding 75 lots at $0.56/share.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument

For the 2nd market day after the 30Jun11 announcement, the Lee Family has continued to buy more LKT shares.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument
and added another 57 lots at $0.555/share.

It is indeed rather strange - when the Lee Family sees more value and confirms so by buying more LKT shares from the open-market, they are still minority shareholders who would give in to them!

This is the 3rd market day in a row that the Lee Family has bought more LKT shares....
http://info.sgx.com/webcorannc.nsf/Annou...endocument
and added another 25 lots at $0.555/share on 5Jul11 (yesterday).

"The Board of Directors of Lee Kim Tah Holdings Limited (the “Company”) wishes to announce that it has entered into a Subscription Agreement to subscribe up to 1,468,558 ordinary shares of WaterTech Pte Ltd (“WaterTech”) at S$1.40 per share.

WaterTech is a design, build, management and development company, specialising in water management and ecological engineering works and is incorporated in Singapore in 2004. From 2008, WaterTech obtained the support of Spring SEEDS Capital (Ministry of Trade and Industry) and SEACARE Foundation (a co-operative under the National Trade Union Congress) and Kota Holdiings Pte Ltd, as major shareholders. After six years of development and nurturing, WaterTech has now become an ecologically-friendly-engineering-asset developer, owner, designer, and manager."

i wonder if this is a sensible way to grow..

LKT's 28Jul11 announcement on investing in local water engineering and treatment company, WaterTech P/L, by taking up a 20% equity stake for approx. $2.06m via subscription of new shares.....
http://info.sgx.com/webcoranncatth.nsf/V...B0028E53D/$file/Investment_in_WaterTech_Pte_Ltd.pdf?openelement

More info on WaterTech....
http://www.watertech.biz/

Having reviewed the website, I get a feeling that WaterTech has a driven and passionate management team headed by William Ng and Liew Ming Choy. Read the following article on WaterTech written by SPRING Singapore to judge for yourself....
http://www.watertech.biz/pdf/springmay09.pdf

I suppose that could be the main reason behind LKT's decision to invest in this not exactly related business. Anyway, $2.06m is like a small potatoe when we compare it with LKT's financial capacity and resources.

green water for jurong point?

Q2/1H (ended 30Jun11)-FY11 results just out.....
http://info.sgx.com/webcoranncatth.nsf/V...900328C8D/$file/June2011Result.pdf?openelement

The purchase of additional 25% stake in JP2 - completed on 30Jun11 - has enlarged LKT's B/S total, including adding $166.6m in new debts and raising total gross debts to $407.4m (of which $392.0m is secured against JP); net debts as at 30Jun11 stood at $345.0m.

If LKT sells its now 50% stake in JP (JP1+JP2) at the latest professional valuation of $723.8m, the company will end up in a huge $378.8m net cash position - equivalent to $0.749/share (based on the latest 505.443m outstanding issued shares).

Based on the latest professional valuation of JP, LKT's 30Jun11 NAV has increased to a new record of $386.781m, or $0.7652/share. As this does not include the additional hidden value in LKT's other property assets, it is conceivable that LKT is worth quite a lot more.

Anyway, what is certain is that from Q3 onwards, LKT will be reporting a much higher rental income from its now full 50% stake in JP.

re-valuation gain continues to be the biggest contributor to the profit, excluding revaluation gain, operational profit would be around 3 million only.

as an asset play, there is always the question, can you sell it at the valuation, especial an expensive asset like JP valued at around 1.5 billion?

the other thing I don't like is that normally as a company other than a reit, loan on investment properties should be amortized as a conservative way of managing debt risk. But the company simply just rolls over the debt. it does not look to me as a long term asset owning strategy.