Uphill climb Down Under for some S'pore investments

July 31, 2008
Uphill climb Down Under for some S'pore investments
ABC Learning, Australand struggle but Optus manages to hold its own
By SIOW LI SEN

(SINGAPORE) It's not only in the US but in Australia too that the
global credit crunch has hurt some of Temasek Holdings' investments.

The price of ABC Learning, the world's largest listed childcare
provider has collapsed almost 90 per cent from when Temasek first
bought into the company in May 2007 at A$7.30 a share.

Yesterday, the troubled ABC closed at 82.5 Aussie cents.

ABC has been selling assets to pay off its debt of A$1.7 billion
(S$2.2 billion) - loans it took to fund its rapid expansion last year
in the United States.

ABC is aiming to raise A$800 million from sales in the US and the UK.

Temasek Holdings had first invested A$401.5 million for a 12 per cent
stake in ABC in May last year. Then early this year, as the stock of
ABC plunged, Temasek raised its stake to 14.7 per cent.

Temasek said in a statement to the Australian stock exchange that it
paid between A$2.14 and A$4.20 per share for the nearly 12 million
shares it bought mainly in February.

But its holding in ABC has been pared back slightly to 12.68 per cent
after the childcare provider completed an A$82 million equity
placement in June.

Lazard Asset Management is now ABC's largest shareholder with 12.93
per cent, followed by Temasek.

Another Temasek-related entity that needs money is Australand, a
property company which has announced a one-for-one rights issue at
A$0.60 a share to raise A$557 million.

CapitaLand, which owns 54 per cent of Australand, is committing A$302
million to the rights issue and if all minorities do not take up
their entitlements, CapitaLand's stake could increase to 70 per cent,
said a JP Morgan report yesterday.

This week, Australand said property revaluation and project writedown
have resulted in a 79 per cent year-on-year fall in net profit to
A$25.6 million for the half-year ended June 30, 2008.

The assets are located predominantly in Sydney, which Australand says
has continued to 'suffer more difficult market conditions with no
improvement forecast in the short to medium term'.

Australand, acquired by CapitaLand's predecessor DBS Land in 1994,
went public in 1997 and is listed in Singapore too, where it is
rarely traded. In 2003, it was restructured into a property trust.

Australand last traded at 97.5 Aussie cents and has fallen almost 60
per cent year to date.

A Temasek spokeswoman said 'no comment' when asked how it viewed the
performance of its investments in Australia.

But one Australian asset owned by Temasek-linked company Singapore
Telecommunications that has done relatively well is its unit Optus,
the second largest telco after Telstra.

SingTel is now listed in Australia, after it bought Optus in 2001.

Last year, Optus's revenue of A$7.8 billion made up 67 per cent of
SingTel's group revenue of S$14.8 billion.

SingTel yesterday closed here at $3.57, down 11 per cent year to date
outperforming the benchmark Straits Times Index, which is down more
than 15 per cent.