TTJ Holdings

Over the last 10+ years, i do have much trust in Boss Teo, he is an honest, capable biz owner, the part about the offer price does put a bitter taste indeed, 

i can understand that money do have such an over-bearing influence, even on long-outstanding characters/personality, it's nothing personal, just maximizing profits...

that's how i view it so far,




 

(21-05-2022, 11:00 AM)money Wrote:  if you look at the old posts, some shareholders have so much trust in the boss. But when you look at the offer price, sometimes you wonder if shareholders are being treated fairly... then again, the business economics may not be as positive as it appears to be

(21-05-2022, 11:00 AM)money Wrote:  if you look at the old posts, some shareholders have so much trust in the boss. But when you look at the offer price, sometimes you wonder if shareholders are being treated fairly... then again, the business economics may not be as positive as it appears to be

Mr Teo has engaged boutique CMS (capital markets services) firm Asian Corporate Advisors Pte. Ltd. to advise and front the GO. Asian Corporate Advisors Pte. Ltd. appears just a small and obscure firm, as it doesn't even maintain a proper corporate website. I have not come across the firm before, and its 2 managing directors - Mr Liau Hong Kong and Ms Poh Foo Quee-Yin - do not have a track record of successfully completed many corporate finance deals to show. I now start to wonder whether Mr Teo is properly advised in this important exercise.

Tomorrow morning TTJ will restart trading..
https://links.sgx.com/1.0.0/corporate-an...d94da53a3a

Because of the GO at $0.23/share, the price will likely trade towards $0.23. Whatever minority shareholders choose to do, do bear in mind that once you sell your shares, you will forgo all your rights, including any increase in the GO price later.

(22-05-2022, 04:13 PM)dydx Wrote: Tomorrow morning TTJ will restart trading..
https://links.sgx.com/1.0.0/corporate-an...d94da53a3a

Because of the GO at $0.23/share, the price will likely trade towards $0.23. Whatever minority shareholders choose to do, do bear in mind that once you sell your shares, you will forgo all your rights, including any increase in the GO price later.

I agree. Do not accept the offer as it stands. If any shareholder would like to discuss options, please send me a DM here. I think it’s important we work together to get a fair outcome.

Lim & Tan sent out a daily review report - 23 may 2022 on TTJ,

TTJ Holdings ($0.169, trading halt) has been informed by Asian Corporate
Advisors (on behalf of THC Venture) that it intends to make a voluntary
condiƟ onal off er for all it’s issued and paid-up ordinary shares for a
consideraƟ on of S$0.23 in cash. The Off eror intends to privaƟ se the
Company and does not intend to preserve the lisƟ ng status of the
Company.

The Off er will be condiƟ onal upon the Off eror and the parƟ es acƟ ng in
concert with it holding more than 90% of the total number of issued
Shares (excluding any Shares held by the Company in treasury) as at the
close of the Off er
As at the Announcement Date, the Off eror has received an undertaking in
respect of 294,900,000 Shares (represenƟ ng in aggregate approximately
84.4% of the Shares in issue pursuant to which Mr Teo has undertaken to,
amongst others, (a) accept the Off er in respect of all Shares held by him;
and (b) accept the Off er in respect of any other Shares or securiƟ es in the
capital of the Company that he may acquire on or aŌ er the date of the
Irrevocable Undertaking.

RaƟ onale: Opportunity for Shareholders to realise their investment in the
Shares at a premium over the market price without incurring brokerage
costs. Based on the Company’s Condensed Interim Financial Statements
for the Six Months ended 31 January 2022, labour shortages are likely
to persist in the short term and output of the construcƟ on sector is
expected to remain below pre-pandemic levels throughout 2022. The
domesƟ c construcƟ on sector is also expected to face higher material
costs in 2022, largely from persistent supply chain boƩ lenecks, alongside
rising energy prices due to geopoliƟ cal tensions, which have exacerbated
global infl aƟ onary pressures. The Off er Price represents a premium of
approximately 33.6%, 28.8%, 28.0%, and 29.4% over the VWAP price
for the one (1)-month, three (3)-month, six (6)-month and 12- month
periods respecƟ vely, up to and including 12 May 2022, being the last full
market day on which the Shares were transacted prior to the date of this
Announcement.

Compliance costs relaƟ ng to lisƟ ng status and no necessity for access
to capital markets - The Off eror is of the view that in maintaining the
Company’s listed status, the Company incurs addiƟ onal compliance
and associated costs. If the Company is delisted, the Company will be
able to dispense with costs associated with complying with lisƟ ng and
other regulatory requirements and human resources that have to be
commiƩ ed for such compliance. Further, the Company has not carried
out any exercise to raise equity capital on the SGX-ST since its lisƟ ng on
1 April 2010.

Although this off er of S$0.23 represents a premium over its VWAP price,
the deal puts TTJ Holdings to be valued at 0.63x book (NAV 37 cts).
AddiƟ onally, given that they have S$32mln net cash (9 Scts/share) and
record order book of S$187mln,

we think Mgmt is being opportunistic in attempting to privatize the company on the cheap just at the inflection on
point of the construction sector upturn. Noting that this offer is not final  and taking the above consideration, we recommend investors to hold out
for a better offer

https://www.theedgesingapore.com/news/ma...areholders

2 other relevant points supporting TTJ's structural steel business going forward :
1) With bigger arch-rival Yongnam now financially incapacitated, TTJ should emerge as the preferred local supplier of choice, with its market position further strengthened.
2) Continued supply-chain disruptions in China and other countries plus the prevailing very high shipping costs will push foreign players/competitors and those which fabricate their steel structures overseas into a disadvantage, further strengthening TTC's competitive position.

I have shared some thoughts on the TTJ situation on my blog — here's the link for anyone interested: https://generalsandworkouts.blogspot.com...lders.html

Letter to the editor today in the Business Times: https://www.businesstimes.com.sg/compani...j-holdings

The Securities Industry Council (SIC) needs to move urgently to close a gaping
loophole that exists in our corporate takeover rules.
Take the case of TTJ Holdings, a profitable and cash-rich mainboard-listed SGX
entity. Due to the depressed condition of the construction industry in the last 2
years, the stock last traded at 16.9 Singapore cents versus an audited net asset
value of 37 cents.
TTJ is a well-established structural steel construction specialist which had been profitable until the Covid-19 restrictions hit in 2020. It is now on the cusp of a major recovery with the relaxation of operational rules and contracts resumed or newly won. However, its executive chairman Teo Hock Chwee, who I respect, is now moving to buy out the minority shareholders at 23 cents per share. He and family already own 84 per cent of the company. Instead of directly making an offer, he has formed a S$100,000 company called THC Venture Pte Ltd to launch the offer. Since THC Venture owns no shares in TTJ, it will be entitled to compulsorily acquire dissenting minority shareholders’ interests in the company once it secures 90 per cent of TTJ via the 23 cents offer. Now, as Mr Teo HC has already committed to accept the offer for his entire shareholding, THC Venture will immediately secure 84 per cent of TTJ and just needs to secure 6 per cent of outstanding shares to hit the 90 per cent threshold.
After that, THC Venture will have the right to compulsorily acquire the remaining 10 per cent of TTJ not yet owned by it. This will be manifestly unfair to minority shareholders like me who have been long-term investors and wish to ride the impending business upturn. Why should we be forced out of TTJ at the low-end or trough of the business cycle? TTJ had, in pre-Covid years, paid decent dividends and the offer price of 23 cents is a far cry from my own fair value of 50 cents per share. The problem in these unfair takeovers lies in the loophole where a major shareholder need not secure 90 per cent of minority shares before compulsory acquisition and delisting can take place. He/she is allowed to use a new shell company to launch the takeover. In TTJ’s case (and several other buyouts in the past 2 years), Mr Teo does not need to secure 90 per cent of the 16 per cent equity he does not already own. He just needs THC Venture to secure 90 per cent of the overall equity, including his own 84 per cent. So there is no need for him to make a much better offer. TTJ will likely be privatised and delisted via the current desultory offer of 23 cents per share. But this fait accompli need not play out if the SIC can intervene. Minorities can only hope something will be done before it is too late.

(24-05-2022, 03:59 PM)generalsandworkouts Wrote: Letter to the editor today in the Business Times: https://www.businesstimes.com.sg/compani...j-holdings

The Securities Industry Council (SIC) needs to move urgently to close a gaping
loophole that exists in our corporate takeover rules.
Take the case of TTJ Holdings, a profitable and cash-rich mainboard-listed SGX
entity. Due to the depressed condition of the construction industry in the last 2
years, the stock last traded at 16.9 Singapore cents versus an audited net asset
value of 37 cents.
TTJ is a well-established structural steel construction specialist which had been profitable until the Covid-19 restrictions hit in 2020. It is now on the cusp of a major recovery with the relaxation of operational rules and contracts resumed or newly won. However, its executive chairman Teo Hock Chwee, who I respect, is now moving to buy out the minority shareholders at 23 cents per share. He and family already own 84 per cent of the company. Instead of directly making an offer, he has formed a S$100,000 company called THC Venture Pte Ltd to launch the offer. Since THC Venture owns no shares in TTJ, it will be entitled to compulsorily acquire dissenting minority shareholders’ interests in the company once it secures 90 per cent of TTJ via the 23 cents offer. Now, as Mr Teo HC has already committed to accept the offer for his entire shareholding, THC Venture will immediately secure 84 per cent of TTJ and just needs to secure 6 per cent of outstanding shares to hit the 90 per cent threshold.
After that, THC Venture will have the right to compulsorily acquire the remaining 10 per cent of TTJ not yet owned by it. This will be manifestly unfair to minority shareholders like me who have been long-term investors and wish to ride the impending business upturn. Why should we be forced out of TTJ at the low-end or trough of the business cycle? TTJ had, in pre-Covid years, paid decent dividends and the offer price of 23 cents is a far cry from my own fair value of 50 cents per share. The problem in these unfair takeovers lies in the loophole where a major shareholder need not secure 90 per cent of minority shares before compulsory acquisition and delisting can take place. He/she is allowed to use a new shell company to launch the takeover. In TTJ’s case (and several other buyouts in the past 2 years), Mr Teo does not need to secure 90 per cent of the 16 per cent equity he does not already own. He just needs THC Venture to secure 90 per cent of the overall equity, including his own 84 per cent. So there is no need for him to make a much better offer. TTJ will likely be privatised and delisted via the current desultory offer of 23 cents per share. But this fait accompli need not play out if the SIC can intervene. Minorities can only hope something will be done before it is too late

What Mona Sabnani wrote is spot on! SIC should be looking into his pointers.