"Pity vino lovers in China, who due to Beijing’s coercive tariffs on Aussie vintners will miss out. #AussieAussieAussieOiOiOi!"–— US National Security Council on Twitter, weighing in on the growing diplomatic row between China and Australia.
Grab and Gojek close in on terms for merger
Grab Holdings and Gojek have made substantial progress in working out a deal to combine their businesses in what would be the biggest Internet merger in Southeast Asia, according to people with knowledge of the talks.
The region’s two most valuable startups have narrowed their differences of opinion, though some parts of the agreement still need to be negotiated, said the people, asking not to be named because the talks are private. The final details are being worked out among the most senior leaders of each company with the participation of SoftBank Group Corp’s Masayoshi Son, a major Grab investor, one of the people said.
Under one structure with substantial support, Grab co-founder Anthony Tan would become the CEO of the combined entity, while Gojek executives would run the new combined business in Indonesia under the Gojek brand, the people said. The two brands may be run separately for an extended period of time, one of the people said. The combination is ultimately aimed at becoming a publicly listed company.
Representatives of Grab, Gojek and SoftBank declined to comment. The talks are still fluid and may not result in a transaction, the people said. The deal would need regulatory approval and governments may have antitrust concerns about the unification of the region’s two leading ride-hailing companies.
Grab and Gojek have been locked in a fierce, expensive battle for dominance in that business, along with food delivery and mobile payments, over the last several years. Investors have been pushing for them to combine forces across Southeast Asia in order to reduce cash burn and create one of the most powerful Internet companies in the region. Grab, which is present in eight countries, was last valued at more than US$14 billion ($18.74 billion), while Gojek, valued at US$10 billion, has presence in Indonesia, Singapore, the Philippines, Thailand and Vietnam.
SoftBank has been pushing for a deal since Son visited Indonesia in January, but he has grown increasingly frustrated with the lack of progress. The old rivalry and personality clashes between the two companies’ leaders have led to deadlocked negotiations in the past, according to one of the people familiar with the talks.
Sea’s rise as a formidable force in e-commerce and digital payments has injected fresh impetus to the Grab-Gojek conversation, the people said. The Singapore-based company’s e-wallet, ShopeePay, has been gaining market share at a rapid clip, aided by the growing popularity of Sea’s e-commerce platform Shopee. That, in turn, is challenging market leaders GoPay and Grab-backed Ovo in Indonesia.
Sea’s surprise journey from a scrappy startup to Southeast Asia’s most valuable company in the past 10 years has been the “biggest inspiration” for local Internet companies lately, Rohit Sipahimalani, chief investment strategist at Temasek Holdings, said in an interview at the launch of the e-Conomy report in November. Sea went public in 2017 after raising more than US$720 million from investors and now has a market value approaching US$88 billion.
“People are now seeing that the public markets are a viable alternative for Internet companies in Southeast Asia,” said Sipahimalani, whose firm is an investor in Gojek. “But they also recognise that they need to get to a certain scale, which is why the IPO route is becoming more attractive. I think that’s leading to some dialogue around combinations and consolidations in the region.”
He declined to comment on the GrabGojek deal, adding that Singapore’s state-owned investment firm is not taking part in the negotiations. — Bloomberg
Multi-services provider Aedge launches IPO on Catalist
Aedge Group, a multi-services provider of engineering, transport and security and manpower services, has launched its placement of 16 million shares at 20 cents per share on the Catalist board, raising net proceeds of $1.68 million.
The company, started in 2000, offers engineering services, transport services and security and manpower services. Customers range from government agencies to multinational corporations and schools. For one, it runs a fleet of 88 buses serving residential estates and schools.
“We hope to use the funds raised through this listing to upgrade and enhance our hardware and software as well as to acquire more equipment to enable us to capture even more opportunities,” says chairman and CEO Poh Soon Keng.
For its FY2020 ended June 30, the company reported earnings of $0.4 million, down from $1.3 million in the preceding FY2019. Revenue in the same period was $23.7 million, down from $24.5 million in FY2019.
The company attributes the drop to lower revenue from its transport services, and to a lesser extent, its security and manpower services segment, no thanks to the Covid-19 pandemic.
On the other hand, its engineering services business posted higher revenue of $5.9 million in FY2020, up 17.3% y-o-y. “The increase in revenue from our engineering services business segment despite the adverse conditions shows that the prospects for this business segment remain strong. We will continue to enhance our position in this business segment by investing in more scaffold structures and components,” says Poh.
The company now has an order book of $11.7 million. UOB Kay Hian is the sponsor, issue manager and placement agent for the listing.
Trump expected to sign Bill that could delist Chinese companies
US President Donald Trump is expected to sign a Bill that could prevent some Chinese companies from listing their shares on US exchanges unless they adhere to US auditing standards, the White House said on Dec 2.
The Bill, which passed the Senate earlier this year and was approved by the House of Representatives on Wednesday, could hit companies such as Alibaba, tech firm Pinduoduo Inc and oil giant PetroChina Co.
If signed into law, the measure would give Chinese companies listed on US exchanges three years to comply with US auditing rules before being removed from US markets. — Reuters
Davos forum may move to Singapore as WEF holds talks on 2021 location
The World Economic Forum (WEF) has held preliminary talks with officials in Singapore about relocating its high-profile Davos annual meeting.
The WEF is currently planning to hold the 2021 event at the Buergenstock resort in Lucerne, but is considering alternative locations because of the status of the coronavirus outbreak in Europe.
While the Forum and Singapore have held discussions, no decision has been made, according to a spokesperson at Singapore’s Ministry of Trade and Industry. They also said health and safety is the priority and any international conferences must adhere to strict rules.
The WEF plans to make a decision on the 2021 location by Christmas.
The much-hyped event in Davos hosts world leaders, central bankers, corporate executives as well as celebrities and billionaires. It has already been postponed from January to May due to the pandemic. — Bloomberg
