AN INDONESIAN group is poised to take over Sesdaq-listed building contractor and buildings materials supplier Shining Corporation and turn it into ...

AN INDONESIAN group is poised to take over Sesdaq-listed building contractor and buildings materials supplier Shining Corporation and turn it into a property developer in Singapore, with a focus on high-end residential projects.

Shining Corporation said yesterday it has entered into an agreement for British Virgin Island-incorporated Citipoint Asia Real Estate Capital, which is owned by Indonesia’s GoldenFlowerGroup, to invest up to about $42 million in the company for a 69.2 per cent stake.

Citipoint is a special purpose vehicle wholly owned by Indonesian Nico Po who, together with his Indonesian father Po Sun Kok, control the GoldenFlowerGroup, whose interests range from apparel manufacturing to financial services and real estate. In Singapore, the group’s investment holdings include MacDonald House, an office building along Orchard Road, and 51 apartment units at Suite@Central, also in the Orchard Road area. A recent en-bloc acquisition of residential land at 55 Devonshire Road is set to launch the group into the development of high-end residential apartments.

Under the placement agreement announced by Shining yesterday, Citipoint will invest $21.75 million through the subscription of 167.3 million new shares in Shining at 13 cents apiece. A further injection of up to $20 million is expected through the issue of up to 155.65 million free warrants to Citipoint at an exercise price of 13 cents a share.

The 167.3 million placement shares will give Citipoint an equity stake of 53.7 per cent. If the warrants are fully exercised, the stake will go up to 69.2 per cent of the enlarged capital.

The deal is subject to certain conditions to be met by March 31, 2008. They include: a whitewash waiver to exempt Nico Po from a general offer; the approval of the Singapore Exchange; a requirement for Shining to maintain a net tangible asset of $12 million by Dec 31, 2007; and the approval by Shining shareholders.

In a statement, Nico Po said: ‘I am excited by the prospects of securing a majority stake in Shining Corporation Ltd.’

He added that with the enlarged capital base and access to the GoldenFlowerGroup’s real estate expertise, he hoped the company would be able to leverage its potential to be a high-end residential property developer.

Tan Kay Kiang, Shining Corporation’s chairman added: ‘The Singapore property and construction market has seen considerable growth in recent years.’

He added that the company has increasingly felt the need to have an increased market capitalisation and larger financial resources for growth in this market.

In view of the new thrust, certain business divisions of Shining will be divested.

Source : Business Times - 11 Sept 2007