Stamford Land is in advanced negotiations on an investment opportunity with a “substantial” size, the property developer and hotel operator’s management said at the annual general meeting Friday, according to the minutes.
“If it materializes, shareholders would have the details via the company’s announcement and that will explain the substantial capital needs,” said the meeting minutes summarizing the comments of Chairman Ow Chio Kiat.
The company pointed to the potential investment in response to shareholder questions on why the dividend hasn’t been raised.
“The group is making big stride to expand,” the minutes said in summarizing Ow’s comments. “It is not possible for the company to declare high dividend when it is expanding its business. Any new investments would be funded using internal resources of the group, raising fund from shareholders through rights issue is not the approach that the board would opt for.”
In addition, Ow said the hotel management industry doesn’t typically have a high dividend payout rate.
When a shareholder asked in which countries Stamford Land would considering investing in light of the U.S.-China trade war and Brexit, the chairman said the group had been actively looking for opportunities.
“The world is currently awash in excess money, and it is challenging and tough decision to make new investments,” the chairman said, according to the summary in the minutes, and he asked shareholders to be patient.
Danny Lim, the independent non-executive director of Stamford Land, clarified that the investment opportunity was “in line with the ordinary business of the group.”
“The board was not able to confirm if the investment would take place as it was not within its control, but he assured shareholders that an announcement with the requisite details would be released if it materializes,” the minutes said, summarizing Lim.