Company Briefs: First Sponsor Group

First Sponsor Group

Developer First Sponsor Group has acquired a hotel property in Milan, Italy, for about €9.3 million (S$14.4 million) in cash from BNP Paribas real estate investment fund Fondo Kona, according to market filings yesterday before the stock market opened.

The six-storey building with a basement is located at Corso Buenos Aires no 33. The property, which is now vacant and unleased, was formerly a 65-room four-star hotel. Its designated use remains as a hotel.

The purchase price has been paid in full via a wholly owned subsidiary using internal cash resources and credit facilities. Acquisition costs are estimated at €1.4 million, including an insurance premium and taxes paid in relation to the insurance policy.

According to a bourse filing yesterday, First Sponsor does not have information on the book value or net tangible asset value of the property.

As such, the purchase price was derived based on the current property market conditions in Milan, the physical condition of the property, its location, renovation costs, the estimated earnings before interest, tax, depreciation and amortisation of the property based on hospitality use, and insurance costs.

Separately, the group also noted that there is ongoing litigation between a former tenant of the property and the seller, with the former alleging that there was a preliminary sale and purchase agreement in relation to the property, and that the seller is obliged but has failed to execute the agreement. The next hearing is expected to be held in March.

Pan Ocean

South Korean carrier Pan Ocean wants to buy two new ships, the company disclosed, after a board resolution was passed yesterday. It had entered a long-term contract to ship iron ore the day prior. The board voted to invest 121.6 billion won (S$147 million), or 5.05 per cent of its share capital, towards a shipbuilding contract for two cape-size bulk carriers for long-term cargo contracts.

Singapore-listed Pan Ocean added in its bourse filing that the vessel delivery dates of between Sept 30, 2020, and April 29, 2021, "might be changed, depending on shipbuilding process".

Meanwhile, a freshly inked five-year contract with miner Vale International will see Pan Ocean carry about 8.12 million tonnes of Brazilian iron ore from the second half of 2020.

Pan Ocean most recently reported a net profit of US$108.6 million for the nine months to Sept 30, 2018, up by 30.4 per cent on the year before, on revenue of US$1.85 billion in that period.

Correction note: An earlier version of the article said that Pan Ocean reported a net loss of US$1.68 million for the nine months to Sept 30, 2018. This is incorrect. It reported a net profit of US$108.6 million. We are sorry for the error.

A version of this article appeared in the print edition of The Straits Times on January 26, 2019, with the headline 'Company Briefs'. Subscribe