Thursday 22 February 2018

Australian deal puts Blackstone focus on sheds

Blackstone chief executive Stephen Schwarzman
Blackstone chief executive Stephen Schwarzman

Pooja Thakur and Joyce Koh

Blackstone is in talks to acquire industrial property assets in Australia valued at about A$250m (€162m) from Malaysian palm-oil producer Sime Darby Bhd., according to people familiar with the matter.

The New York-based private equity firm is in discussions to acquire as many as five industrial buildings in Australia, sources said, asking not to be identified because the discussions aren't public. Blackstone has also agreed to buy a majority stake in three of Sime Darby's property assets in Singapore valued at about S$300m (€192m).

The conglomerate, Malaysia's biggest listed palm-oil producer, is looking to sell its property assets in Australia and Singapore in its efforts to pare debt. Chief Executive Mohd Bakke Salleh told reporters at a February 24 briefing in Kuala Lumpur that the company is seeking to raise 1.5bn Malysian Ringgit (about €326m) through sales.

"In Australia, we have 13 properties and in Singapore we have three. We are looking at disposing off office buildings and industrial properties in the two countries," Salleh told reporters in February. The asset sales and an Islamic bond issuance will help reduce Sime Darby's gearing to 54pc by the fiscal year ending June 30 from 61pc currently, Salleh said.

"We are working on various options including asset monetization to help manage the gearing level," Sime Darby said in an e-mailed statement on Tuesday, declining to comment on any talks with Blackstone. A Blackstone spokeswoman declined to comment on the talks.

The properties in Australia are the ones associated with the conglomerate's industrial unit, Sime Darby Industrial Division, the world's third-largest Caterpillar dealer. The industrial unit has dealerships across 140 branches in 10 countries throughout the Asia Pacific.

Sime Darby's shares have declined 1.8pc this year compared to a 2.4pc decline in the benchmark FTSE Bursa Malaysia KLCI Index. (Bloomberg)

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