BT : Property business to carry on as usual, says F&N

Business Times - 29 Jul 2010

Property business to carry on as usual, says F&N

Temasek nominee Ng Yat Chung steps down from board

By EMILYN YAP

(SINGAPORE) Kirin Holdings' presence as the second largest shareholder of Fraser & Neave (F&N) is unlikely to have any impact on the latter's property and beer businesses.

Responding to queries from BT, F&N said: 'Kirin's shareholding will not affect Frasers Centrepoint, which is one of the leading property companies in Singapore.'

Kirin will also not have a hand in operations at F&N's listed unit Asia Pacific Breweries (APB). 'Kirin will be a shareholder of F&N and will indirectly benefit from the continuing strong operating performance of APB, but it will not be involved in APB,' F&N said.

'If it makes commercial sense for APB and Kirin to work together in other markets, then (they) will have to meet and discuss the merits of furthering their relationship.'

APB currently distributes one of Kirin's beers, Kirin Ichiban, in Singapore.

F&N's comments provide a clearer picture of how it will work with Kirin. The Japanese beverage group said on Monday it is buying Temasek's 14.7 per cent stake in F&N for $1.336 billion. It also said it will explore collaboration with F&N.

Kirin's move got the market wondering if F&N's property business would be affected. There were also questions about future dynamics between Kirin and APB - the former is a beer giant in Japan while the latter has established itself in South-east Asia with Tiger beer.

F&N and Kirin have yet to discuss partnerships, but they could look for synergy in the soft drink and dairy sectors.

'We recognise their strengths in certain product categories such as dairies and soft drinks, and have always regarded the research and development capabilities of Japanese firms very highly,' F&N said.

While the shareholder change has yet to affect operations at F&N, it has triggered a movement on its board. Temasek's nominee Ng Yat Chung is stepping down from today.

He was a non-independent non-executive director, a member of the board's executive committee and a member of its food-and-beverage committee.

At Temasek, Mr Ng is head of portfolio management and operations and co-head (Singapore).

There is no indication who his replacement will be at F&N. But a Kirin investor relations person told BT on Tuesday the group hopes to have representation on F&N's board. F&N and Kirin have yet to discuss this.

According to F&N's website, there are eight seats on the board - including the one occupied by Mr Ng. The board is led by former Singapore Telecom chief executive officer Lee Hsien Yang, and its directors include Soon Tit Koon, OCBC Bank's head of group investments.

OCBC Group is F&N's largest shareholder, with a stake of about 18 per cent.

F&N's shares lost nine cents yesterday to close at $5.65.

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