Wilmar

Wilmar: Enters into a JV with Kerry Properties and Shangri-La Asia for development of real estate. The JV has bid successfully for 3 sites in China, Bayuquan, Yingkou City, Liaoning province for total of US$36m. Sites are designated for residential, commercial and hotel use and have area of 200k sqm gfa…

Co will hold 35%, Kerry 40% and Shangri-la 25% stakes in the JV. Wilmar's invt will be US$134m of total US$386m. Funding to be from internal sources and bank borrowings. JV is conditional upon all necessary approvals from Chinese authorities...

Considered an interested party transaction as Kuok Khoon Chen and Kuok Khoon Ean are the Chairmen of Kerry and Shangri-la respectively and are also directors of controlling shareholder of both co, Kerry Holdings. Both are cousins of Kuok Khoon Hong….

Rationale is to leverage on Wilmar's business affiliation and network in China. GS issues note that while rationale is sound, real estate is a departure from core business and there maybe concerns on mgmt losing focus. GS has a Neutral rating at TP S$6.25