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FEHT insiders scoop up units amid steep decline; Peter Lim nibbles on Secura

The Edge Singapore
The Edge Singapore • 3 min read
FEHT insiders scoop up units amid steep decline; Peter Lim nibbles on Secura
With the purchase, Golden Development owns 1.19 billion shares in FEHT or 61%, up from 60.99% previously.
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SINGAPORE (Apr 17): A private entity called Golden Development recently bought 350,000 units of Far East Hospitality Trust (FEHT) at an average price of 39.214 cents on the open market.

Golden Development is owned by proper- ty magnate Philip Ng of Far East Organization, which is the sponsor of FEHT.

With the purchase, Golden Development owns 1.19 billion shares in FEHT or 61%, up from 60.99% previously.

Meanwhile, Huang Cheng Eng, an independ- ent director of FEHT, also bought some units re- cently. On March 18, Huang, a former SIA senior executive, bought 400,000 units, paying between 43–45 cents. With the acquisition, Huang now owns 976,514 units, or 0.05%, nearly doubling his stake in the REIT.

Gerald Lee Hwee Keong, CEO of FEHT’s manager (picture), also bought units in the REIT. On March 25, he bought 1,400 units at 39 cents each. The following day, he bought another 98,600 units at 39 cents again. Lee now holds a total of 521,415 units, or 0.027% or FEHT.

FEHT has a total portfolio value of some $2.65 billion. It consists of nine hotels and four serviced residences. It has a master lease that consists of a fixed rent of $67 million a year, plus, a variable component that is made up of a third of gross operating revenue of the properties and a gross operating profit, which aver- ages at 30% across its portfolio.

The acquisitions by these FEHT insiders were made amid the Covid-19 outbreak which has badly hurt the hospitality sector. One of the earliest known Covid-19 cases in Singapore stayed at one of the hotels under FEHT. Its unit price was 75 cents at the beginning of the year but has dropped to as low as 35 cents after travel curbs were put in place around the world.

However, FEHT, which owns nine hotels and four serviced residences, is getting some support from the government under the lat- ter’s “stay home notice” order to curb the local transmission of Covid-19. Six of FEHT’s proper- ties have been designated by the government to house people who have to be quarantined after entering Singapore for up to 14 days.

Peter LIm nibbles on Secura

Kestrel Investments bought 1,105,000 Secura Group shares at $41,990, or an average of 3.8 cents per share, on April 6.

Kestrel Investments is wholly owned by Peter Lim, the former “Remisier King”. Kestrel now owns just over 165 million shares, or 41.26%, in Secura, making it the largest shareholder.

The last time Kestrel bought shares in Secura from the open market was back in Nov 26, 2018. Back then, it had bought 394,800 shares for $29,610. This works out to an average cost price of 7.5 cents. Prior to that, on April 13, 2018, Kestrel bought 3.9 million shares for $346,671, or 8.9 cents each.

For the FY2019 ended Dec 31, 2019, Secura reported earnings fell by 80.4% to $366,000 from $1.87 million in FY2018. Revenue fell 6.1% to $38.7 million from FY2018. The company also had to bear higher administrative and finance costs and it had to book an impairment of $115,000 in a joint venture. While it paid a dividend of 0.3 cent for FY2018, no dividend was declared for FY2019. The company warned that several major contracts for its security guard business were not renewed. However, it sees improvement in the remote surveillance business.

Besides Secura, Lim has been scooping up shares in the open market in another company which he controls. On April 1, Lim bought 5.4 million shares of Thomson Medical Group for $244,800, raising his stake to nearly 23.3 billion shares, or 88.02%.

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