Business Times - 14 May 2007
CitySpring net loss 16 times of IPO projection
By CONRAD TAN
CITYSPRING Infrastructure Trust, which is backed by Temasek
Holdings, yesterday announced a net loss of $56.1 million for the
seven weeks to end-March, more than 16 times the projected sum at
the time of its listing.
Revenue of $34.3 million for the period from its Feb 12 listing to
March 31 was eclipsed by expenses of $100.4 million, which included
$63.4 million in management fees.
This gave rise to a net loss attributable to unitholders of $56.1
million. In its listing prospectus, CitySpring had projected a net
loss of $3.4 million for the two months from Feb 1 to March 31 and
management fees of just $566,000.
The actual amount paid to the trust's manager comprised both a
performance fee and base fee. CitySpring said that no performance
fee was included in the projection at the time of listing, while
the base fee projection was based on the minimum pro-rated base fee
of $3.5 million per year.
According to CitySpring's prospectus, the performance fee is 20 per
cent of the total return on its units above the total return on the
MSCI Asia-Pacific ex-Japan Utilities Index for each quarter. Since
CitySpring's unit price rose from 89 cents at listing to $1.49 at
end-March, while the benchmark index fell 4.5 per cent, the units
were deemed to have outperformed the benchmark by 74.3 per cent
over the period, resulting in the large performance fee
payout.
Temasek is the single largest unitholder, with a stake of over 20
per cent. CitySpring owns City Gas Trust and 70 per cent of
SingSpring Trust, owner of the only large-scale seawater
desalination plant here.
It will pay a distribution per unit (DPU) of 0.78 of a cent in June
for the period ended March 31 and reaffirmed its DPU projection of
six cents for the year to March 31, 2008.
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Is this good news or bad news?
Any financial gurus here?
