SP AusNet

tfwee · Veteran

RE: Singapore Power

KK · Guru

SP AusNet

KK · Guru

Got a new possible reason for poor price performance of SP AusNet,

Fm IPO prospectus, FY2007 forecasted figures,

Oct-05 Average Exchange Rate : A$1 = S$1.2752
Dividends Payout = A$235.9Mil or S$300.82Mil
No. of shares = 2,092,680,010
Div/share = S$0.14375
ie. Gross Yield = 8.71% @ $1.65
Net Yield = 8.48% (less 2.6% tax : 10% with-holding tax applicable only on profits)

But,

Net Profit after Tax = A$156.2Mil or
EPS = S$0.09518
ie. Gross Yield = 5.77% @ $1.65
Net Yield = 5.19% (less 10% with-holding tax)

For FY2006-7, the forecasted dividend payout includes capital returns which comprises aro' 65% of payout. This capital returns hv the effect of raising the yield and lowering the tax (fm 10% to effective 2.8% and 2.6% respectively for FY2006 and FY2007). Fm FY2008, the net dividend yield may be lower if based on only Net Profit after tax.

KK · Guru

The Govt Bond yield in Australia is now aro' 5.4%. SP AusNet at $1.65 offers 8.485% yield, thus aro' +3% fm risk free rate.

If u compare with S'pore, risk free rate is 3%+ for SGS Bonds . For best yield REITs (Suntec and AREIT), it's 6%. So, REIT (6%) - Risk-Free (3%) = ~3% spread. Presto! an explanation for SP AUsNet price today

tfwee · Veteran

RE: Singapore Power

KK · Guru

SP AusNet

TimT · Newbie

RE: Singapore Power

tfwee · Veteran

Australia SP AusNet IPO Top End Price A$1.38-Source -2-(MORE TO FOLLOW) Dow Jones Newswires December 06, 2005 18:23 ET

Australia SP AusNet IPO Top End Price A$1.38/Shr - Source

MELBOURNE (Dow Jones)--Singapore Power's bookbuild to float its Australian SP AusNet energy unit is set to close Wednesday around A$1.38 a share, a source close to the deal said.

"That price would be at the top end of the price range," the source said.

On Nov. 7, Singapore Power said it would offer shares in the bookbuild at between A$1.29 and A$1.57.

(MORE TO FOLLOW) Dow Jones Newswires

December 06, 2005 18:33 ET

Australia SP AusNet IPO Top End Price A$1.38-Source -2-

At A$1.38 each for the 1.03 billion stapled securities in SP AusNet being sold, the initial public offering would raise about A$1.42 billion (US$1.1 billion).

The distribution yield on the securities at the bookbuild price is expected to be about 8%, the source said. In the November SP AusNet prospectus, the yield was estimated to be between 7% and 8.5% for the year ending March 31 .

A different source familiar with the deal said the bookbuild price may not be announced until Thursday morning.

He said the securities had been more heavily sought by overseas institutional investors than had been anticipated, complementing strong interest from Australian and Singaporean retail investors.

The securities are expected to start trading in Singapore on Dec. 14 on a "ready" basis and be listed in Australia on a deferred settlement basis on the same date. They will be listed in Australia on Dec. 19 on a normal delivery basis.

Comment Well, if this is true then the IPO price for SGX market will be around $1.76. For those who maintain to get it, should be able make some money for Christmas present. Santas is coming to Town

-- Edited by tfwee at 09:32, 2005-12-07

-- Edited by tfwee at 18:06, 2005-12-14

KK · Guru

This stock is more for yield play. At the higher end price of $2, u can expect at least 7% (or 6.3% after deducting 10% Australia with-holding tax) yield for 2005 and 2006. The closest comparable class of stocks would be REITs (Suntec @ $1.07 and AREIT @ $1.94 are the highest yielding at 6%) and MIIF (hv not computed the yield but I believe it's higher than 7% @ $0.94).

As the biz is highly regulated by the Australian govt, u don't expect this to be a high growth kind of biz. Fm pg 39 onwards of IPO prospectus,

5.3.2. Electricity Transmission Revenues
The transmission business earns network charges and connection charges equal to an annual, regulated, fixed amount (i.e. not dependent upon the actual volume of electricity transmitted), and also earns network availability and reliability incentive payments. The network charges and connection charges, which together represent 90% of SP AusNet’s pro forma transmission revenue for the year ended 31 March 2005, is subject to a cap set by the ACCC based in part on the regulated asset base of the business.
5.3.4. Network Growth
SP AusNet does not plan transmission capital expenditure projects because, in the Victorian market model, this is the function of VENCorp, distributors and generators. However, whilst SP AusNet is unable to augment the transmission network without a request from VENCorp, the generators or the distributors, new transmission projects are sometimes awarded to SP AusNet on a non-contestable basis, which assists in the further expansion of SP AusNet’s transmission network. Between 1 January 1999 and 31 July 2005, A$145 million of non-contestable asset works were added to the asset base, with another A$61 million of works in progress.
SP AusNet expects that investment will continue in the transmission network as VENCorp and electricity distributors increase capacity to meet steadily increasing load growth. As shown in the below chart, maximum demand has increased over the last few years and is forecast to grow over the next two years. SP AusNet anticipates that demand will continue to grow at a rate of 2.3% for the 2006-2007 period, leading to growth in the regulated asset base for the transmission business.
5.4.2. Electricity Distribution Revenue Profile
In financial year 2005, approximately 85% of SP AusNet’s pro forma electricity distribution revenues were derived from regulated tariffs, with the remaining electricity revenues coming from customer contributions to capital works and excluded services such as meter reading, meter data management and public lighting.
5.5.2. Revenue Profile
Approximately 87% of SP AusNet’s gas distribution revenues are derived from regulated distribution tariffs for delivery of gas by SP AusNet’s gas distribution system, with the remaining gas revenues derived from customer contributions to capital works and excluded services such as meter reading and meter data management.
5.5.5. Network Growth
SP AusNet strives to enhance its network capacity to meet ongoing increases in demand for the use of its gas distribution network. SP AusNet believes its current capital expenditure plan is sufficient to meet foreseeable future increases in demand for gas.
As illustrated in Figure 5.26, SP AusNet’s gas distribution network has experienced an increase in the number of end users over the past five financial years. In particular, the growth in residential and commercial consumption has seen a compound annual growth rate of 4.6% during this period.

In addition, take note of foreign exchange risk as all their revenues are in A$. If A$ stregthens against S$, it's good for the Singapore investors. But the reverse would be bad. If u look at MIIF, which hv all their assets in Australia n Europe, the share price is not performing very well, thus offering a current net yield greater than 7% (but it could also be due to the complexity of their hldgs).

So, it depends on what u r looking for. For me, a min. 6.3% (after tax) net yield does not appear very attractive as compared to suntec, esp. since we hv to take on foreign exchange risk. Nevertheless, I'll still apply for this IPO as at $2, I can't afford to apply that many lots and I'll likely end up being balloted 1-2 lots if successful (thus, only $2000-$4000 exposure, which is not that high, after all).

TimT · Newbie

Anyone can advise this IPO can subscribe or not? Very expensive....

tfwee · Veteran

Hong Kong's CLP questions SingPower data on 2.13 bln aud power deal - report
18 November 2005, 09:10

HONG KONG (XFN-ASIA) - CLP Holdings has questioned the accuracy of data provided by Singapore Power (SingPower) relating to Australian-based energy assets that the latter sold to the former earlier this year in a 2.13 bln aud transaction, the South China Morning Post has reported.

CLP's allegations were revealed in the listing prospectus of SingPower subsidiary SP AusNet, which was involved in the CLP deal and which is scheduled to float on the Australia stock exchange next month, the report said.

CLP claims that SingPower has understated projected expenditure on operations and information technology for the five financial years to March 2010 by 15.8-24.7 mln aud a year and that the number of customers was inflated by 50,000, resulting in an overstated gross margin of about 10 mln aud annually.

tfwee · Veteran

Singapore Power IPO Prospectues

The following information is extracted from the Prospectuses.

Singapore Offering (all times in Singapore time)

Opening date and time for the Singapore Public Offer: 9am, 19 Nov 2005
Singapore Placement bookbuilding commences: 9am, 19 Nov 2005
Closing date and time for the Singapore Public Offer: 9pm, 6 Dec 2005
Closing date and time for the Singapore Placement bookbuilding: 5pm, 6 Dec 2005
Price Determination and allocation date: 7 Dec 2005
Balloting of applications in the Singapore Public Offer, if necessary Commence returning or refunding of application monies to unsuccessful or partially successful applications and commence returning or refunding of application monies to successful applicationsfor the amount paid in excess of the Final Price, if necessary 8 Dec 2005
Commence trading on SGX-ST on a ‘‘ready’’ basis: 14 Dec 2005
Settlement date for all trades done on SGX-ST on a ‘‘ready’’ basis: 19 Dec 2005

Institutional Offering

Institutional Offering bookbuilding commences 5 Dec 2005
Institutional Offering bookbuilding completed 7 Dec 2005
Price Determination and allocation date 7 Dec 2005

3.2. Singapore Offering

Singapore Offering:
The Singapore Offering consists of the Singapore Public Offer (including the Reserved Securities) and the Singapore Placement.

Singapore Public Offer :
Securities are being offered in Singapore at the Maximum Offering Price by way of an offering to the public in Singapore (including the Reserved Securities) in Singapore dollars.

Singapore Placement:
Securities offered by way of a placement to individuals, corporations and other investors in Singapore at the Final Price in Australian dollars.

Reserved Securities :
Up to 1.5% of the total number of Securities available under the Offering (‘‘Reserved Securities’’) will be reserved for Directors and employees of Singapore Power Limited and its subsidiaries (other than those who are eligible for the Australian Priority Offer). The Reserved Securities will be offered on the same terms as the other Securities in the Singapore Public Offer. If any of the Reserved Securities are not taken up, they will be made available to other investors in any part of the Offering.

Singapore Offering Size:
It is intended that the minimum size of the Singapore offering will be 153,812,000 Securities, of which a minimum of 30,000,000 Securities is intended to be set aside for the Singapore Public Offer.

Maximum Offering Price:
S$2.00 per Security (equivalent to A$1.57 based on an $/S$ exchange rate of 1.2714), which was the prevailing exchange rate on 31 October 2005. Investors applying in the Singapore Public Offer are required to pay the Maximum Offering Price, subject to a refund if and to the extent that (i) an application is rejected or accepted in part only; or (ii) the Offering does not proceed for any reason; or (iii) the Final Price is less than the Maximum Offering Price, in the equivalent in Singapore dollars based on the same fixed exchange rate as described above. All refunds will be without interest or any share of revenue or other benefit arising therefrom.

Application monies:
Pending the transfer of Securities, application monies will be held in a separate non-interest bearing account with DBS, the Receiving Bank. Any refund of all or part of the application monies to unsuccessful applicants will be made without any interest or share of revenue or other benefits arising therefrom.

Clawback and reallocation:
Securities offered may be reallocated between the Singapore Public Offer and the Singapore Placement in the event of excess applications in one and a deficit in the other.

-- Edited by tfwee at 14:59, 2005-11-07

-- Edited by tfwee at 15:00, 2005-11-07

-- Edited by tfwee at 10:50, 2005-11-16

-- Edited by tfwee at 10:52, 2005-11-16

tfwee · Veteran

Extracted From Dow Jones

Saturday November 5, 8:53 AM
SINGAPORE PRESS: SP AusNet Lodges Prelim IPO Prospectus

SINGAPORE (Dow Jones)--SP AusNet, the Australian unit of state-owned Singapore Power Ltd., Friday lodged its preliminary prospectus for an initial public offering that will raise up to S$2.05 billion, local newspapers reported Saturday.

SP AusNet, whose shares are being promoted based on their ability to "deliver sustainable, stable and predictable distribution" to investors, will offer an initial forecast yield of between 7% and 8.5% based on the indicative IPO price of up to S$2.00 a share, the Business Times said.

The offering will be open from Nov. 19 to Dec. 6 and the securities are expected to start trading on Dec. 14, the newspaper added.

SP AusNet is seeking a primary listing on the Australian Stock Exchange with a concurrent secondary listing on the Singapore Exchange.

For the financial year ended March 31, 2005, SP AusNet had pro forma revenue of A$905 million and earnings before interest and tax of A$439 million.

The Australian company's assets include full ownership of the primary electricity transmission network, an electricity distribution network and a gas distribution network in the Australian state of Victoria. An estimated 87% of SP AusNet's revenue is generated from activities that are subject to regulation.

Singapore Power, a wholly owned unit of Singapore's state-owned investment companyTemasek Holdings Pte. Ltd., will retain a 51% stake in SP AusNet after the IPO, according to Business Times.

-- Edited by tfwee at 15:38, 2005-11-05

-- Edited by tfwee at 14:25, 2005-11-07

tfwee · Veteran

SP AusNet