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Two JTC units may be privatised
Industrial property developer is looking into spinning off Ascendas and Jurong Consultants in two to three years
By: Vladimir Guevarra
JTC CORPORATION, Singapore's largest industrial property developer, said it is looking into privatising two subsidiaries in two to three years.
They are Jurong Consultants, an engineering consultancy firm with about 600 employees, and Ascendas, JTC's real-estate developer for high-tech space both in Singapore and abroad with about 300 staff.
The announcement comes just one day after the Entrepreneurship and Internationalisation Sub-committee of the Economic Review Committee (ERC) called for 'a conscious effort to divest of enterprises owned by statutory boards'.
It proposed that the statutory boards follow the 'yellow pages' rule and exit from businesses which the private sector is providing already.
When asked about this yesterday, during the official launch of JTC's 'e-initiatives', online services for the business and industrial communities, its chief executive officer Chong Lit Cheong said: 'Clearly, we are looking at two of our subsidiaries - Jurong Consultants and Ascendas - which are most ready for privatisation.'
Welcoming the ERC recommendations, he said they are in fact 'no longer new' to JTC Corp.
'We had reorganised JTC last year, anticipating that some of the activities that JTC had been doing are no longer developmental, but much more commercial in nature,' he added.
Of the two units targeted for privatisation, Ascendas is seen as a prize with $1.2 billion invested in 1.2 million sq m of space in technology and business parks located not only in Singapore, but also in China, India and the Philippines.
A check with the Registry of Companies and Businesses shows that Jurong Consultants incurred a net loss of $9.2 million in the year ended March 2001.
Figures for Ascendas are not available.
JTC did not reveal how much the two units contributed to its bottom line or how the divestment would take place as it was still early days.
In the year ended March 31, 2001, JTC Corp's operating income jumped 8 per cent to $1.34 billion, its website said.
News of the divestment plan was well-received by analysts and private industrial developers yesterday.
Knight Frank's senior director for business space, Mr Nicholas Wong, described it as a 'good move' which will give the private sector a bigger role in the two units' operations and services.
He said companies likely to be interested in the privatisation are industrial property developer GBI Realty, the Sim Lian property and construction group as well as property heavyweight City Developments which operates the New Tech Park along Lorong Chuan.
Another analyst, who declined to be named, said the move may also interest other developers such as Seatown Development, Heshe Holdings and even Far East Organization which has industrial land parcels in Tuas.
The analyst said JTC could sell the units through initial public offerings or to several strategic partners.
Seatown Development general manager Christopher Tan is among the players who hailed the move.
He said: 'This is a very good sign that the Government is opening up and listening more to the requests of the private sector.'