InnoTek Limited has invested S$15.7 million in Sabana Shari’ah
Compliant Industrial Real Estate Investment Trust (Sabana REIT),
which was listed last Friday on the Mainboard of the Singapore
Exchange, in a move to enhance shareholder value by increasing the
return from its cash holdings.
InnoTek said it has been allotted 15 million shares at an issue price
of S$1.05 each in Sabana REIT, the first Shari’ah-compliant real
estate investment trust listed on the SGX and the world's largestlisted
Shari’ah-compliant REIT by total assets.
The precision metal components manufacturer, which has substantial
operations in China, held net cash of S$60.8 million or S$0.266
per share as at 30 September 2010. It disposed its data storage
business in FY2007 for US$133 million and has since paid S$0.3
dividends per share, including S$0.05 each year for FY2008 and
“InnoTek has a strong balance sheet and we are very careful how
best to return value to shareholders. While we are still looking to
acquire companies which can add value to our core business, we will
not be rushed. This investment in the REIT offers a much better
return than in bank deposits,” said InnoTek’s Managing Director Mr
Yong Kok Hoon.
According to Sabana REIT’s prospectus, its Reit manager Sabana
Real Estate Investment Management has forecast a distribution yield
of about 8.22 per cent for 2011 and 8.25 per cent for 2012.
InnoTek concurrently announced that it had commenced its share
buyback programme with the acquisition of a combined 583,000
shares so far in November.
It currently holds 19.03 million treasury shares, or 8.3 per cent of the
total issued capital of 227.6 million shares as at 26 November 2010,
after substantial buybacks since the financial year ending 31 December
Treasury shares are stocks bought back by the issuing company,
reducing the total number of issued shares in the open market. A
reduced issued share capital base increases the earnings per share
and saves the company in dividend payment, indirectly resulting in a
higher yield on net cash.