CFA Society Singapore
SINGAPORE (Oct 26): Shares in Sapphire Corp, the railway infrastructure engineering firm, closed 6% or 2 cents to 32 cents on Friday with 1.5 million shares changing hands .
The Edge Singapore this week (Issue 803) reports China’s HNA Holding Group Co is acquiring a major stake in Sapphire. This could open doors for the company to win more contracts amid a boom in infrastructure development spending in emerging markets.
On Oct 18, Sapphire said HNA’s subsidiary Hong Kong International Construction Investment Management Group (HKICIM) would issue more than 40.5 million new shares at HK$4.08 (18.9 cents) each in exchange for more than 56.5 million shares in Sapphire, held by an entity called Ou Rui, which is controlled by an individual named Li Xiaobo.
HKICIM will also issue nearly 24.9 million new shares at the same price in exchange for nearly 34.7 million shares in Sapphire held by an entity called Best Feast.
These transactions will give HKICIM an approximate 27.97% stake in Sapphire.
Over the years, Sapphire has been involved in a string of businesses, including loss-making forays into steel production and mining.
Following the acquisition, Sapphire has secured a slew of new contracts, pushing its order book to a record level of RMB3.4 billion ($698.1 million) and is now also looking beyond China for growth, as the country pushes its Belt and Road Initiative.
Even without HKICIM’s backing, Sapphire was already actively pursuing contracts in countries such as Thailand and Malaysia, which are trying to upgrade their physical infrastructure.
With HNA's backing, Sapphire might now even experiment taking stakes in some of its projects, under the public-private partnership model.
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