Published October 31, 2009

EGM Watch
CapitaLand gets shareholder nod to list retail arm

By UMA SHANKARI
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CAPITALAND shareholders at an extraordinary general meeting (EGM) yesterday approved the company's plan to spin off and list its $20.3 billion retail portfolio - after just one hour.

But many of them were concerned with two issues - how much the special dividend payout from CapitaMalls Asia's (CMA) listing will amount to, and whether they will get preference when it comes to subscribing for CMA shares.

In response to their queries, CapitaLand's management said it could not say at present how much the special dividend payout will be.

Market watchers have estimated that if CapitaLand floats a 30 per cent stake of CMA, it could book a pre-tax profit of $800 million to $1.4 billion from the IPO.

Chief financial officer Olivier Lim said the company will only pay dividends from IPO profits, not gross proceeds, and only after setting aside funds to take advantage of opportunities to grow the group's other business divisions.

The company also reiterated that it will not give existing CapitaLand shareholders preference when it comes to applying for CMA shares. To do so would disadvantage overseas investors, Mr Lim said.

Investors also asked about CapitaLand's plans for its two retail real estate investment trusts (Reits) - CapitaMall Trust (CMT) and CapitaRetail China Trust (CRCT) - which will be held under CMA. Both Reits will continue to enjoy the existing rights of first refusal they have from the group.

'CMT and CRCT are still very much a core part of our overall strategy,' Mr Lim said.

In early October, CapitaLand announced plans to rename its retail arm CapitaLand Retail and float its shares on the Singapore Exchange.

The newly minted CMA, which will have a pan-Asian portfolio of 86 retail properties, will take the lead on all future retail activities, while CapitaLand will focus on non-retail businesses.

To kick off yesterday's EGM, CapitaLand chief executive Liew Mun Leong told shareholders the listing to CMA will make CapitaLand stronger. 'After this, CapitaLand will be much stronger in our finance,' he added.

About 380 CapitaLand shareholders and proxies attended the EGM yesterday. The company's shares gained six cents, or 1.5 per cent, to close at $4.14 yesterday.