Globalstar Expands South American Reach; Centro Properties Puts Itself on the Auction Block; Vietnam Brewer Sabeco Plans IPO; PHH Corp. LBO Falls Through
- Globalstar Inc. (GSAT), a leading provider of mobile satellite voice and data services, announced yesterday (Wednesday) that it has reached an agreement with Loral Space & Communications Ltd. (LORL) for the company's Brazilian Globalstar gateway operator. The purchase price of $6.5 million will be paid principally in Globalstar common stock. A Globalstar subsidiary will own and operate the Brazilian gateways. Globalstar estimates the three ground stations it aims to purchase will give the company access to 200 million Brazilian customers. Globalstar has seen a rise in demand for its services throughout South America and Central America. It has operations in both regions, as well as maritime and coastal-service operations. The deal is still subject to approval by the Brazilian telecommunications agency. The new shares being issued to Loral must also be registered with the U.S. Securities and Exchange Commission.
- Faced with a Feb. 15 deadline to refinance $3.4 billion in debt, Australian shopping-mall company Centro Properties Group (CEOPF) said it would put itself up for sale. According to company Chairman Brian Healy, Centro Properties has already received several unsolicited offers. The company declined to say how many parties had expressed an interest so far, but said that both domestic and foreign parties have made offers. "Centro is now seeking expressions of interest for key alternatives available to it," Healey said in a statement to the Australian Securities Exchange. "This will enable interested parties to substantiate their interest, and for all such proposals to be evaluated from the perspective of the best interests of all Centro stakeholders." The company will also accept offers for its two wholesale real estate funds: Centro Australian Wholesale Fund and the Centro America Fund. On Dec. 17, the company's stock dropped 77% when the company announced that it would eliminate its dividend and slashed profit forecasts.
- Vietnam's largest brewer, Saigon Beer Alcohol Company, has announced that it will go public later this month. Commonly known as Sabeco, the state-run firm plans to sell 20% of its shares in an initial public offering with an expected value of $557 million. The IPO was originally scheduled for August 2007, but the company did not receive necessary regulatory approval until Dec. 28, 2007. The Vietnamese government will retain a 79.61% stake in the company. According to a press release from the Ho Chi Minh Stock Exchange, the offering will take place on Jan. 28, with 126,257,000 shares offered at $4.34 each. The deal values Sabeco at $2.78 billion. The company currently controls 30% of the Vietnamese beer market and expects to grow at least 10% a year over the next decade. The company did not have 2007 financial results available, but said that production capacity had grown 15% in 2005 and 2006. Sabeco's brands include Saigon Beer and Beer 333. Beer production in Vietnam rose 19.2% overall in 2007.
- PHH Corp. (PHH) announced in a statement that it has terminated its planned $1.8 billion sale to General Electric Co. (GE) and private equity firm Blackstone Group LP (BX). Blackstone failed to arrange the financing needed to complete the transaction by the Dec. 31 deadline. JPMorgan Chase & Co. (JPM) and Lehman Brothers Holdings Inc. (LEH), the two investment banks that originally planned to finance the deal, withdrew the loans on the basis that PHH's mortgage-backed securities did not provide sufficient collateral. The recent turmoil in the credit markets has made financing-leveraged buyouts much more difficult than in the past. In an e-mail to Reuters, Blackstone spokesman John Ford said that Blackstone was willing to go ahead with the deal as arranged, but that the banks were unwilling to provide financing under the deal's original terms. In the original offer, GE and Blackstone would have bought PHH with GE keeping the vehicle fleet company and Blackstone retaining its mortgage operations. PHH has requested the payment of a $50 million breakup fee from Blackstone and its affiliates. A. B. Krongard, the non-executive chairman of PHH, said the board would continue to explore alternatives but could give no assurances that a new deal would be forthcoming.