The Straits Trading Company Limitedstraitstrading.listedcompany.com/newsroom/20130628... · and 13 May 2013 released by The Straits Trading Company ... Joint Venture ... in Asia-Pacific

The Straits Trading Company Limited

Extraordinary General Meeting

28 June 2013

Disclaimer

This investor presentation should be read in conjunction with the full text of the announcements dated 15 April 2013

and 13 May 2013 released by The Straits Trading Company Limited (“STC”) and the circulars dated 10 June 2013

and 12 June 2013 (“Circulars”) issued by STC in relation to the Proposed Transaction and the Acceptance. Unless

otherwise defined in this investor presentation and except where the context otherwise requires, capitalised terms

used herein shall have the same meanings as ascribed to them in the Circulars. Shareholders are advised to read all

the announcements and documents relating to the Proposed Transaction and the Acceptance that have been or shall

be released by STC in connection with the Proposed Transaction and the Acceptance, copies of which may be

obtained from the SGX-ST website (www.sgx.com).

All statements other than statements of historical facts included in this investor presentation are or may be forward-

RESOURCES • PROPERTY • HOSPITALITY © Copyright 2013, The Straits Trading Company Limited. All rights reserved.

All statements other than statements of historical facts included in this investor presentation are or may be forward-

looking statements. Forward-looking statements include but are not limited to those using words such as “seek”,

“expect”, “anticipate”, “estimate”, “believe”, “intend”, “project”, “plan”, “strategy”, “forecast” and similar expressions or

future or conditional verbs such as “will”, “would”, “should”, “could”, “may” and “might”. These statements reflect

STC’s current expectations, beliefs, hopes, intentions or strategies regarding the future and assumptions in light of

information available as at 27 June 2013. Such forward-looking statements are not guarantees of future performance

or events and involve known and unknown risks and uncertainties. Accordingly, actual results may differ materially

from those described in such forward-looking statements. Shareholders should not place undue reliance on such

forward-looking statements, and STC undertakes no obligation to update publicly or revise any forward-looking

statements.”

2

http://www.sgx.com/

Section I

OverviewOverview

Resources PropertyHospitality

Next growthengine

STC Group

• 30% in Hospitality JV• Investment in FEH-T

The STC Platform


Business Network & Connectivity

Management Expertise

Corporate Finance & M&A Capabilities

Good Governance & Business Ethics

4

The STC Mission

“To shape and transform our investmentsinto businesses of enhanced value”


5

The STC Strategy

Acquire assets

that fit investment

criteria

Adjust business

strategy & capitalUnlock value Dividends / Cash flow


Develop assets

into “engines”

strategy & capital

structure

Unlock value Dividends / Cash flow

6

The STC Transformation

SPA with Far East Hospitality Trust & Serene Land Pte. Ltd.for the sale of Rendezvous Grand Hotel Singapore andRendezvous Gallery

Joint Venture Implementation Agreement (“JVIA”) with FarEast Orchard Limited to form a 30/70 JV Company (“JVC”).Underlying agreements executed on 19 June 2013.

1


Share swap completed in January 2013 to increase stake inWBL to 40.6%

MGO launched upon completion of share swap; MGOallowed to lapse on 1 March 2013

Entire stake tendered in the competing offer at S$4.50per WBL stock unit – gross cash proceeds of c.S$508.8million

7

17% stake in WBLCorp Limited

2

http://www.rendezvoushotels.com/default-en.html

STC’s Current Hospitality Division

Hotel assets

1 Singapore hotel

3 Australian hotels

Hotel management

business

13 hotel

management

contracts and leases

STC’s Restructured Hospitality Division*

S$68 million of

FEH-T units

Dividend income

from FEH-T units

30% in Hospitality

JV with FEOrchard

>6,000 rooms under

management

contracts and

Gross cash

proceeds of

S$273 million

Significant cash

Transformation of Hospitality Division


from FEH-T units

Continued

exposure to

Singapore

hospitality assets

contracts and

leases in Singapore,

Malaysia, Australia

and Shanghai

(including STC’s 13

hotels under

management)

3 Australian hotels

Transactions provide a scalable platform for expansion in the hospitality segment

proceeds

available to be

deployed into

other value

accretive

investments

< 3,000 rooms under management

Limited profitable growth opportunities

as a small scale standalone player

* Assuming completion of the proposed transactions with Far East Orchard Limited(“FEOrchard”) and Far East Hospitality Trust (“FEH-T”) which were announcedon 15 April 2013

8

32.09.6

8.0

5.54.1 3.8 3.3 2.9 2.9 2.8 2.6 2.1

Shangri-LaAsia

Pan PacificHotels Grp

MandarinOriental Hotel

Group

Great EaglesHldgs

FormosaInternationalHotel Corp

Banyan TreeHldgs

FEO OverseasUnion

Enterprise

Hotel GrandCentral

STC Sino Grp ofHotels

StamfordLand

Pre

-tra

nsacti

on

Nu

mb

er

of

Ro

om

s(‘

000)

1,2

tran

sacti

on

Nu

mb

er

of

Ro

om

s1

,2

Hospitality JV - Scale for Future Expansion


Po

st-

tran

sacti

on

Nu

mb

er

of

Ro

om

s(‘

000)

1,2

JV will have > 6,000 rooms under management

Platform to achieve optimal scale with minimal capital outlay

Transforms STC’s hospitality business into a sizeable Asia Pacific hotel operator

32.09.6

8.0

6.0 5.54.1 3.8 3.3 2.9 2.9 2.8 2.6 2.1

Shangri-LaAsia

Pan PacificHotels Grp

MandarinOriental

Hotel Group

JVC Great EaglesHldgs

FormosaInternationalHotel Corp

Banyan TreeHldgs

FEO OverseasUnion

Enterprise

Hotel GrandCentral

STC Sino Grp ofHotels

StamfordLand

(1) Peer set comprise companies that are (i) listed hotel management companies / hotel owners in Asia-Pacific excluding companies listed in India, Philippines and Japan;(ii) market capitalisation of above US$100m; (iii) based in Asia-Pacific; (iv) with presence in more than one country in Asia-Pacific and at least two of the four marketswhich STC’s hotels are located

(2) Estimated rooms from hotels under management (both owned and third party) globally

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Section II

Proposed Sale of Rendezvous Grand HotelProposed Sale of Rendezvous Grand HotelSingapore and Rendezvous Gallery

ProposedTransaction

Sale of STC’s entire leasehold interest in Rendezvous Grand Hotel Singapore(“RGHS”) and the Rendezvous Gallery (“RG”)

AggregateConsideration

Aggregate consideration of S$285 million comprising:

– S$217 million in gross cash proceeds

– S$68 million in FEH-T units

Summary of the Proposed Transaction


Shareholders’Approval

STC Shareholders’ approval for sale of RGHS and RG and proposedacquisition of the Consideration Securities

FEH-T unitholders’ approvals already obtained

CompletionDate

Proposed transaction is expected to complete by August 2013 subject tofulfillment of other conditions in the SPAs

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Realisation ofIncrease inBook Value

168.0

285.1 282.6 285.0

c.S$117m increase inbook value

Value of RGHS / RG (S$m)

Realisation ofenhanced value

1

Transaction Rationale


Partnershipwith an

establishedhospitality

player

Stake in Far East Hospitality Trust

JVIA with FEOrchard for hospitality management business

12

Book Value(Dec 2009)

Book Value(Dec 2012)

Book Value(Mar 2013)

Deal Value

2

ValueAccretive

Transaction

3

-0.07

0.80

1Q2013 EPS (cents) 1Q2013 NTA per Share (S$)

3.37

3.44

Pre-Transaction Post-Transaction

+2.1%

Transaction Rationale (Cont’d)


GenerateCash

Proceeds andRecurring

Income

S$217 million in cash

S$68 million in FEH-T units:

Dividend income

Continued exposure to Singapore hospitality sector

13

4

-0.07



(1)

Section III

Acceptance of the mandatory conditional cash


Acceptance of the mandatory conditional cashoffers for WBL Corporation Limited made for andon behalf of UE Centennial Venture Pte. Ltd.

TransactionBackground

13 May2013:

STC acceptsUE revised

offer

1 Mar2013:

STC offerlapses

16 Jan 2013:Announcementof STC’s firm

conditionalMGO

30 Jan 2013:UE announcespre-conditionalvoluntary offer

12 Mar2013:

UE makesmandatorycash offer

9 May2013:

UE revisesoffer price

26 Nov 2012:Announcementof share swapand possible

MGO

Transaction Background

23 May2013:

Settlementof

acceptance


Background

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Note:(1) Initial offer price of S$3.41 adjusted to account for S$0.05 dividend per stock unit

S$4.00 S$4.15 S$4.50S$3.36(1)

Acceptances

112,734,618 WBL stocks (40.66% of issued WBL stock units1)

S$749,539 principal amount of WBL convertible bonds (0.12% of issued WBL stockunits1)

TotalConsideration

Gross cash proceeds: S$508.8 million

– S$507.3 million for WBL stock units

– S$1.5 million for WBL convertible bonds

Transaction Overview


– S$1.5 million for WBL convertible bonds

ShareholdersRatification

Acceptances of STC Group’s entire stock and convertible bond holding in WBLgeneral offer by UE for a cash consideration of S$508.8 million

STC’s largest shareholder, The Cairns Pte. Ltd., has undertaken to vote in favor of thetransaction

16

Note:(1) Based on the total number of issued WBL stock units of 277,246,035 as at 13 May 2013

ValueCreation for

both STCShareholders

and WBLStockholders

1WBL Offer Price (S$)

3.28(1) 3.41

4.00 4.154.50

1 yr VWAP STC offer UE offer UE revised offer UE final offer

+37.2%



ValueAccretive

Transaction

17

2

Note: (1) As at 23 November 2012, being the last full day of trading of the WBL stock units prior to the date of announcement of STC’s possible offerannouncement on 26 Nov 2012

1Q2013 NTA per share (S$)

-0.07

21.83

Pre-Acceptance Post-Acceptance

3.37

3.59

Pre-Acceptance Post-Acceptance

+6.5%

1Q2013 EPS (cents)

ExecutionRisk in

Unlocking

Lack of assurance of a common goal for WBL between STC and othermajor shareholders

IFA revised valuation range since STC’s offer to account for challengingmarket conditions for WBL businesses

IFA low end valuation (S$) IFA high end valuation (S$)

3

-3.6%



UnlockingValue in WBL

18

4.614.32

STC offer(13-Feb-13)

UE revised offer(09-Apr-13)

-6.3%

5.35 5.16

STC offer(13-Feb-13)

UE revised offer(09-Apr-13)

Section IV

Conclusion


Conclusion

The STC Platform

Resources PropertyHospitality

STC Group

• 30% Hospitality JV• Investment in FEH-T

Nextgrowthengine

• Well managed &sound businesses

• Potential to generatestrong cash flows

• Value accretive

• Ability for STC to add

Investment Criteria


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Business Network & Connectivity

Management Expertise

Corporate Finance & M&A Capabilities

Good Governance & Business Ethics

• Ability for STC to addvalue

STC’s Investment Advantage

Strong, patient

Long term,value focused

philosophy

Origination


21

Strong, patientcapital base

ExecutionCapability

OriginationCapability


Documents

The Straits Trading Company Limitedstraitstrading.listedcompany.com/newsroom/20130628... · and 13 May 2013 released by The Straits Trading Company ... Joint Venture ... in Asia-Pacific