By Angela Tan angelat@sph.com.sg

Singapore

SINGAPORE Telecommunication’s di-vestment of fibre broadband infra-structure operator, NetLink NBN Trust, in the latter’s upcoming initial public offering (IPO) is key to main-taining its ‘A+’ rating, but rating head-room remains low, Fitch Ratings said on Wednesday.

NetLink – which owns and oper-ates the passive infrastructure for Singapore’s next-generation national broadband network – expects to raise net proceeds of up to S$2.6 bil-lion from its listing on the main-board of the Singapore Exchange. The IPO comes ahead of a mandated April 2018 deadline set by the Info-communications Media Develop-ment Authority to divest its share-holdings in NetLink to less than 25 per cent. “Our projections assume Singtel will use S$1.5 billion of the proceeds from the divestment of Net-Link towards deleveraging in FY18,” the credit rating agency said.

Fitch added that the listing was “timely, as the group undergoes heavy capex expansion to drive its mobile and ICT businesses, as well as large spectrum payments in Singa-pore and Australia”.

Singtel expects to spend S$2.4 bil-lion in cash capital expenditure and another S$1 billion in spectrum pay-ments in FY18. Following the IPO, Singtel will continue to hold a stake of less than 25 per cent in NetLink.

The divestment will have a lim-ited impact on Singtel’s earnings be-fore interest, tax, depreciation and amortisation. The business trust is already equity accounted at the par-ent company despite Singtel’s 100 per cent ownership due to the ab-sence of effective control in the trust.

Singtel shares closed two cents higher at S$3.82 on Wednesday.

By Chai Hung Yinchaihyn@sph.com.sg@ChaiHungYinBT

Singapore

LOCAL precision engineering firm Feinmetall Singapore unveiled its S$6 million digital manufacturing facility on Wednesday.

Aimed at deepening its capabilit-ies and improving productivity, the new 6,700 square foot facility fea-tures advanced manufacturing tech-nologies that allow it to analyse ma-chine data, develop measures to min-imise stoppage and plan machine maintenance schedules effectively.

These capabilities help the com-pany, which specialises in the design and manufacturing of wafer probe cards for semiconductor wafer tests, eliminate manual and paper-based tracking that is time-consuming and prone to errors.

The SME (small and medium-sized

enterprise) also has an e-portal to

help its clients troubleshoot and main-

tain products remotely using instruc-

tional videos.

This reduces the need for its ser-

vice engineers to make overseas trips

to clients’ offices to solve common is-

sues, and is expected to improve pro-

ductivity by 30 per cent.

The company expects to increase

its revenue by up to 115 per cent and

to create 38 high-value jobs in Singa-

pore in the next four years. The com-

pany currently hires 50 employees,

up from a five-man team when it was

first established in 2007.

During the opening ceremony, Min-

ister for Trade and Industry

S Iswaran, said: “Feinmetall Singa-

pore’s digital manufacturing facility

is an excellent example of how our

SMEs are stepping up to build capabil-ities, through digitalisation, to seize new growth opportunities, and serves as a success story and role model for other SMEs.”

The technologies are adopted from the Model Factory@SIMTech, an initiative by A*Star’s Singapore Insti-tute of Manufacturing Technology, and Tech Depot, a one-stop central-ised platform under the SME Portal aimed at improving SMEs’ access to technology and digital solutions.

Feinmetall began working with A*Star in May 2016 to develop a stra-tegic operation and technology roadmap aligned with its business goals to guide its research and devel-opment (R&D) and innovation ap-proach. In the last decade, the com-pany has invested more than S$1.5 million in R&D and seen its revenue grow by six-fold.

Shanghai

CHINA’S securities regulator has stepped up

efforts to protect investors’ interests, publish-

ing a set of “know your customer” rules on

Wednesday that restrict financial institutions

from selling risky products to inexperienced

investors.

The investor suitability rules, which apply

to securities and futures products, were pub-

lished at a time when China’s hedge fund in-

dustry has boomed, while the government is

promoting wealth management investment

in commodities.

The China Securities Regulatory Commis-

sion, which published the rules on its web-

site, said putting more burden on financial in-

stitutions to sell the right products to the

right investors was in line with international

practices after the 2008 global financial crisis,

citing the Dodd-Frank Wall Street Reform and

Consumer Protection Act.

According to the rules, investors will be

classified into two types – ordinary and pro-

fessional. Financial institutions are barred

from promoting “high risk” products to ordin-

ary investors.

Over the weekend, Hong Lei, head of the

Asset Management Association of China,

urged China’s money managers to bear more

responsibility in maintaining financial mar-

ket stability. “Asset managers should put in-

vestors’ interest above their own ... and

should not sell products to those with inad-

equate ability to take risks,” he told a hedge

fund conference in Hangzhou.

The number of private fund products has

boomed in China over the past few years,

growing to 54,541 at the end of May, com-

pared with just 13,663 two years ago. REU-

TERS

By Cai Haoxiang

haoxiang@sph.com.sg

@HaoxiangCaiBT

Singapore

DEL Monte Pacific, known for its

canned pineapples and ketchup, said

on Wednesday morning that it will be

embarking on a series of joint ven-

tures with US-listed Fresh Del Monte

Produce.

The joint ventures, on new

products and a new food and bever-

age retail concept, will initially focus

on the US market.

Facilitating the joint ventures were

the full and final settlement of all act-

ive litigation between the two firms.

The long-standing litigation was

about licensing rights and product

distribution in various territories

around the world.

“We are pleased that we have re-

solved our differences and put to rest

the financial uncertainty that can

arise from prolonged litigation,” said

Del Monte Pacific chairman Rolando

C Gapud.

Fresh Del Monte Produce chair-

man and chief executive officer Mo-

hammad Abu-Ghazaleh said the part-

nership allows both companies to in-novate on a broader and deeper scale.

“We also share similar visions for creating products and experiences that will meet the evolving needs of today’s consumer,” he said.

One key joint initiative is the intro-duction of Del Monte-branded retail outlets, featuring healthier food op-tions to meet increasing consumer de-mand. The companies will also collab-orate on a line of chilled juices, new varieties of prepared refrigerated fruit snacks, and guacamole and avo-cado products.

“The collaboration offers the op-

portunity for each partner to share ex-pertise and optimise economies of scale in product development, opera-tions, sourcing, supply chain, market-ing and distribution,” both compan-ies said. “In addition to retail and new product ventures, the companies have also agreed to a long-term mu-tual supply agreement to accelerate the expansion of Del Monte product sales in various markets around the world.”

Del Monte closed trading at 34 Singapore cents, up half a cent. It is ex-pected to announce its fourth-quarter results today.

Singapore

THE boss of the largest Singapore-

listed company by market capitalisa-

tion earned slightly more this year as

the group’s earnings held steady des-

pite a “challenging business environ-

ment”.

Singtel group chief executive Chua

Sock Koong earned a remuneration

package of S$6.56 million for the fin-

ancial year to March 31 (FY2017).

Ms Chua earned about S$6.39 mil-

lion in the previous year.

Of this year’s pay package, S$5.89

million has been paid out, including a

base salary of S$1.65 million, Singtel

disclosed in its annual report on Wed-

nesday.

Like Ms Chua’s pay, Singtel’s

group net profit was mostly stable

from a year ago. The telco made a net

profit of S$3.85 billion in FY2017,

holding stable from a net profit of

S$3.87 billion the year before.

Although full-year revenue

slipped a little, Singtel was “resilient”

overall, owing to strong core busi-

nesses, higher associate earnings and

lower tax expenses.

Ms Chua said in the annual report:

“Singtel today is markedly different

from the traditional telco we were

five years ago. We’ve strengthened

our competitiveness, and we’re also

more diversified and resilient.” THE

STRAITS TIMES

Xu Ying, an engineer seconded from A*Star’s Institute for Infocomm Research, shows Mr Iswaran how its e-portal can help Feinmetall Singapore's clients troubleshoot and maintain products remotely.

Feinmetall Singapore unveils S$6m digital manufacturing facility

ComfortDelGro

COMFORTDELGRO Corporation (ComfortDelGro) has entered into a share purchase agreement to acquire the remaining 49 per cent stake in CityFleet Networks (CFN) from Cabcharge Australia for £7.9 million (about S$14 million), making CFN a wholly-owned subsidiary.

CFN provides account, booking and despatch services for taxis, private hire cars and coaches in the United Kingdom.

The purchase price is based on a valuation of 5.6 times the FY2016 earnings before interest, tax, depreciation and amortisation (ebitda) of CFN, said ComfortDelGro. As at May 31, 2017, CFN had accumulated profits of £9.1 million.

The acquisition will be financed by internal funds.

CapitaLand Limited

CAPITALAND Limited announced

on Wednesday that its two wholly owned subsidiaries have divested 100 per cent equity interest in Somerset Whitefield Hospitality Private Limited (SWHPL) to parties unrelated to CapitaLand.

CapitaLand said that the equity interest comprises 7,030,775 equity shares of 10 Indian rupees each and 2,947,190 non-cumulative redeemable convertible preference shares of 100 rupees each. The two selling subsidiaries are Ascott International Management Pte

Ltd and Ascott International Management (2001) Pte Ltd.

The consideration was based on the adjusted net asset value of SWHPL as at June 23, 2017 of approximately 347.5 million rupees (S$7.4 million), taking into account, amongst other factors, the agreed land value of 284 million rupees. As a result of the sale, SWHPL has ceased to be a subsidiary of CapitaLand.

Stamford Tyres

STAMFORD Tyres reported a jump in net profit from S$2.59 million in FY16 to S$8.11 million in FY17, thanks in part to lower expenditure. Revenue for the full year slipped nearly 1.5 per cent to S$238.67 million on the back of lower sales in Africa and South-east Asia. Meanwhile, earnings per share rose from 1.10 Singapore cents per share to 3.44 Singapore cents per share. During the quarter, total expenditure fell 3.6 per cent to S$230.35 million.

Stamford Tyres has declared a final dividend of 1.5 Singapore cents, up from 1 cent a year ago.

“The global economic outlook continues to remain uncertain,” said Stamford Tyres. “As a result, our operating environment will continue to be challenging. To mitigate the impact of this challenging environment, the group will continue to optimise its product mix, manage operating costs and build on its core markets in South-east Asia.”

Singtel’s A+ rating hinges on NetLink divestment

China’s securities regulator issues rules to shore up investor protection

Del Monte Pacific in JVs with Fresh Del Monte Produce

Singtel CEO gets pay packageof S$6.56m for FY2017

Ms Chua earned about S$6.39 million in FY2016.

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The joint ventures, on new products and a new food and beverage retail concept, will initially focus on the US market

8 | COMPANIES & MARKETSThe Business Times | Thursday, June 29, 2017