Singapore's Universal Terminal Eyes $770M IPO

by Ship & Bunker News Team
Friday November 21, 2014

Petroleum storage company Universal Terminal (S) Pte. Ltd. (Universal Terminal) has begun sounding out potential investors for an initial public offering (IPO) in Singapore, The Wall Street Journal reports.

It is understood that the IPO would utilise a Singapore Business Trust to include Universal Terminal assets and could fetch in excess of $770 million.

Universal Terminal is 65 percent owned by Singapore's Hin Leong group and 35 percent owned by Chinese company PetroChina Co. Ltd.

The trust is said to be aiming to attract investment by offering a yield of 7.6 percent whereas domestic currency interest rates for deposits at Singapore banks are as low as 0.25 percent.

IPOs of Business Trusts have recently been popular in Singapore as investment funds sought better returns than falling interest rates would allow but, according to the report, as the U.S. winds down its monetary stimulus programme investor appetite may diminish.

Universal Trading is said to be seeking to establish demand from large "cornerstone" investors as a priority.

Such demand is expected to give an indication of how attractive the proposition is to the market.

Petroleum storage terminals in Singapore are said to be running at full capacity, says the report, suggesting Universal Terminal's business operates in a strong market.

Hin Leong last year outlined a plan to spend up to $3 billion building oil terminals and distribution facilities.