Penguin International

(08-11-2017, 07:15 PM)lonewolf Wrote:

Quote:the Company has agreed to subscribe for 357,142,857 Investment Shares for a total consideration of S$10 million payable in cash, of which S$8
million will be paid by the Company and S$2 million by Mr Jeffrey Hing Yih Peir, the Company’s Executive Chairman and controlling shareholder (with the Company holding71,428,571 Investment Shares as a nominee for Mr Jeffrey Hing Yih Peir). 

The S$10 million combined investment will represent an estimated 10% of the then enlarged share capital of MPM upon completion of the Debt Restructuring Exercise and Equity Fund Raising, but before adjustment for such number of Investment Shares to be set aside under MPM’s management award plan

Is this a good investment for Penguin? 10% entitles them to a non-executive nonindependent seat on the Board of MPM but is otherwise not significant enough to make any meaningful corporate decision in Macro Polo Marine. 
So I wonder if this is a pure investment decision or whether Penguin is hoping for some synergetic spillovers for their core business.

Extracted from the Business Times 9 Nov 2017, one short sentence -
"That said, Mr Lee has managed to rope in Penguin International, a crew boat-focused owner-operator and builder.  He highlighted how these two businesses are complementary - Marco Polo's steel boats and Penguin's aluminium craft would complete the offering for charterers." 

This does imply the hope for some synergetic spillovers - both to Marco Polo and Penguin.

From Business Times 9-Nov report:

Quote:But the Lees persevered and took the lead in swallowing the pill to make way for new investors. They will dilute their equity, which now stands at a controlling stake of 62 per cent, to just 6 per cent. Over two billion new shares valued at S$0.028 will be issued to these nine named investors.

From Business Times 8 Nov:

Quote:Of the new investors, Apricot Capital - the private investment vehicle of Super Group's founder David Teo - will emerge the largest shareholder with a 19.5 per cent interest in Marco Polo's enlarged share capital after the deal is completed.

With 10% stake, I think Jeffrey Hing & Penguin should be influential.

MPM is a sinking ship, even after restructuring do you think their business will be flourishing? Well maybe if Arabs continue to have tensions.. Just because recent oil price price shoot up all those big boss think they can ride the wave...

This headline sums it up very well...

Nine investors take PUNT on Marco Polo Marine
http://www.straitstimes.com/business/com...olo-marine
[Nine prominent business people have pooled together $60 million in rescue financing for listed offshore and marine (O&M) group Marco Polo Marine.

The founders behind Super Group, Soilbuild, Goldbell and Yanlord were named in association with the equity injection deal. Oxley Holdings deputy chief executive Low See Ching and Singapore-listed Vibrant Group and Penguin International have also thrown their hats into the ring.

Some, if not all of those named, are business acquaintances of Marco Polo Marine chief executive Sean Lee.]

Note : SUPER GROUP (that's popiah king sam goi right? look at yellow pages and recently Yamada Green)  Yanlord(is this the ah tiong trying to buy up our companies? supposed to be developer right now come do ship stuff??) Oxley another one. 

My take is MPM may end up a pump and dump in the future, everyone walk away happy.

Either that or Vivian Hsu has a very large following of big bosses

Come on. MPM is not a sinking ship.
It is a ship that had already sunk.
Now they are trying to haul it up again from the deep blue sea.

Quite simply, if an investor buys into a company with negative equity,
it is the same as using good money to buy trouble.

Investors are strange, there are plenty of companies with strong/sustainable cash flow and a solid balance sheet at reaonable valuation. But nooo, lets's look for trouble instead. (Then again it maybe small change for the big bosses trying to get an autogrpah or two from Vivian Hsu.)

(11-11-2017, 03:10 PM)Big Toe Wrote: Come on. MPM is not a sinking ship.
It is a ship that had already sunk.
Now they are trying to haul it up again from the deep blue sea.

Quite simply, if an investor buys into a company with negative equity,
it is the same as using good money to buy trouble.

Investors are strange, there are plenty of companies with strong/sustainable cash flow and a solid balance sheet at reaonable valuation. But nooo,  lets's look for trouble instead. (Then again it maybe small change for the big bosses trying to get an autogrpah or two from Vivian Hsu.)

Lol those would be very expensive autographs...

i found more info
http://www.businesstimes.com.sg/companie...olo-marine
[Marco Polo confirmed to The Business Times on Wednesday that Apricot and Penguin will also be granted board seats.

The deals are conditional on - among other things - its total liabilities being pared down to not more than S$12 million prior to the closing of the new investments. The parties involved have agreed to a long-stop date of March 12, 2018.]

[Mr Lee said that the group is seeking about 69 per cent, 71 per cent, and 95 per cent debt forgiveness from its bank lenders, noteholder and for its contingent liabilities, respectively.
New shares will be issued at S$0.035 in part-settlement of these liabilities.
Marco Polo is also proposing to issue over 269 million free warrants to existing shareholders. Each warrant will carry the right to subscribe to one share at the exercise price of S$0.035.]


[Marco Polo is also proposing to issue over 269 million free warrants to existing shareholders. Each warrant will carry the right to subscribe to one share at the exercise price of S$0.035.]

So they are doing the "white knight story" as well as issue warrants and getting banks to forgive debt. Guess what happens after that when the stock start trading again...

(12-11-2017, 03:08 AM)BlueKelah Wrote:

(11-11-2017, 03:10 PM)Big Toe Wrote: Come on. MPM is not a sinking ship.
It is a ship that had already sunk.
Now they are trying to haul it up again from the deep blue sea.

Quite simply, if an investor buys into a company with negative equity,
it is the same as using good money to buy trouble.

Investors are strange, there are plenty of companies with strong/sustainable cash flow and a solid balance sheet at reaonable valuation. But nooo,  lets's look for trouble instead. (Then again it maybe small change for the big bosses trying to get an autogrpah or two from Vivian Hsu.)

Lol those would be very expensive autographs...

i found more info
http://www.businesstimes.com.sg/companie...olo-marine
[Marco Polo confirmed to The Business Times on Wednesday that Apricot and Penguin will also be granted board seats.

The deals are conditional on - among other things - its total liabilities being pared down to not more than S$12 million prior to the closing of the new investments. The parties involved have agreed to a long-stop date of March 12, 2018.]

[Mr Lee said that the group is seeking about 69 per cent, 71 per cent, and 95 per cent debt forgiveness from its bank lenders, noteholder and for its contingent liabilities, respectively.
New shares will be issued at S$0.035 in part-settlement of these liabilities.
Marco Polo is also proposing to issue over 269 million free warrants to existing shareholders. Each warrant will carry the right to subscribe to one share at the exercise price of S$0.035.]


[Marco Polo is also proposing to issue over 269 million free warrants to existing shareholders. Each warrant will carry the right to subscribe to one share at the exercise price of S$0.035.]

So they are doing the "white knight story" as well as issue warrants and getting banks to forgive debt. Guess what happens after that when the stock start trading again...

Penguin management is quite prudent I think. So if they are on board maybe it will help MPM in future. Just my opinion.

Sent from my SM-N9005 using Tapatalk

To better understand Penguin's proposed $10m investment in MPM, it is useful to go through the following -
(1) Penguin's announcement dated 8Nov17
http://infopub.sgx.com/FileOpen/PIL-%20M...eID=477306
(2) MPM's announcement dated 8Nov17
http://infopub.sgx.com/FileOpen/MPML_Upd...eID=477297
(3) MPM's latest Info Memo (prepared in conjunction with the consent solicitation exercise for the $50m 5.75% fixed-rate notes)
http://infopub.sgx.com/FileOpen/MPML_CSS...eID=475056
(4) Penguin's 3Q result
http://infopub.sgx.com/FileOpen/Penguin_...eID=477181

It is to be noted that:
(I) Together with 8 other investors (including Super Group's founder David Teo ($20m), Yanlord Land Group's founding Chairman/CEO Zhong Sheng Jian ($10m), Soilbuild Construction Group's co-founder/Executive Chairman Lim Chap Huat ($5m), Chua Family behind Goldbell Group ($5m), and Vibrant Group ($5m) and 3 other parties), Penguin's proposed $10m investment (of which $2m is for account of Penguin's Executive Chairman Jeffrey Hing) in 357,142,857 new MPM shares at $0.028/share is subject to the completion of stringent Conditions Precedent and Termination conditions, including the requisite approvals for the Debt Restructuring Exercise by all relevant creditors (banks, other financial institutions, bond holders, trade/other creditors) which will have to accept a substantial hair-cut on their amounts owed and convert the remaining amounts into new MPM shares at $0.035/share, and High Court's requisite court orders to sanction the debt restructuring. So the proposed $60m new equity fund raising by MPM is NOT automatic. Assuming everything goes according to plan, Penguin will end up having an approx. 10% interest in the revamped MPM which is supposed to have not more than $12m in remaining debts (reduced from $248m as at 30Jun17) - i.e. MPM would have successfully taken out the untenable debt burden and pressure from lenders/creditors, and should be able to focus on rebuilding its business.

(II) The Info Memo details MPM's assets, and indeed MPM has substantial operating assets, including a well-established medium-size shipyard in Batam and 104 marine vessels of various kind. As most of the vessels were built my its own shipyard, conceivably their recorded NBV may even be conservative. Based on MPM's 31Mar17 B/S, group total assets stood at $439.7m...
http://infopub.sgx.com/FileOpen/MPML_H1F...eID=453622
Mainly driven by the great uncertainty surrounding the debt restructuring exercise just before 30Jun17, MPM's BOD decided to make substantial impairment on the group's assets, and in the 30Jun17 B/S, group total assets was written down to only $124.3m...
http://infopub.sgx.com/FileOpen/MPML-%20...eID=467059
Assuming MPM is successfully revamped, it is conceivable that the BOD will have to consider reversing at least a portion of the huge $315.4m asset impairment taken, so that the true and fair value of the group assets is more reasonably reflected in its B/S.

(III) Apart from entering into it at a attractive price - based on MPM's large asset base and a more realistic valuation of its assets after a successful financial revamp - Penguin's proposed investment in the revamped MPM also carries some strategic considerations. The 2 groups are complimentary in products and markets, and certainly MPM can learn from Penguin's prudent financial management, and fleet marketing and management. Penguin can easily fund the entire proposed $10m investment amount by tapping its $36m ($32.2m, if excluding $3.8m outstanding debts) cash reserve as at 30Sep17, which should remain healthy and may even rise further as and when any of its $30.5m trade debtors and other receivables (comprises a substantial amount related to fleet vessel sale under deferred payment arrangement) is settled.

Overall, it looks like Penguin has gotten a good deal that is likely to even grow in value and business opportunities.

Small profit for 4Q and for YE 2017:

http://infopub.sgx.com/FileOpen/Penguin_...eID=489990

Also a dividend of 0.45c per share.

A lot of cash, slow revival of boat building activities, but compressed margins. Given the financial devastation of many other companies in the sector, Penguin have come through the storm well.

Penguin's FY17 AR...
http://infopub.sgx.com/FileOpen/PIL%20-%...eID=497743

I find the very motivated joint letter (pg 12/13) by Chairman Jeffrey Hing and MD James Tham most invigorating! Quite clearly, Penguin's business and finances have turned around, and fortunes are slowly coming back!

Penguin has a good management. It does not borrow to build but draws on its cash reserves to build vessels for stock. It has moved into new markets like fireboats.

I read through the thread and this Penguin was first spotted around 9 cents. The stock went through a share consolidation of 1:3. So it is equivalent to 27 cents.

Does Penguin still has a sufficient margin of safety now?