Singapore Press Holdings (SPH)

I think most people only look at income in this yield hungry environment and forgot to factor in something else.

Even though net income takes a small hit, so profits are ok, you are forgetting that SPH has taken a bigger hit in the form of loss of NAV

If appraised value is 3billion and ownership is only 70%, the leftover 30% sold to public is actually worth ~900million.

So SPH partially sold off a good asset of 900m value to get back only 700m, I see that as a 200million dollar loss.

If they really need the 700m spare cash it would be better to use the property to secure a loan.

Bro,

1. The paragon asset is Freehold. Sold to REIT for 99 years only.

2. And they get the REIT manager fees too.

This is why REITs are almost always getting the raw end of the stick.
REITs thrive in low interest environment.

(20-06-2013, 08:45 PM)BlueKelah Wrote: I think most people only look at income in this yield hungry environment and forgot to factor in something else.

Even though net income takes a small hit, so profits are ok, you are forgetting that SPH has taken a bigger hit in the form of loss of NAV

If appraised value is 3billion and ownership is only 70%, the leftover 30% sold to public is actually worth ~900million.

So SPH partially sold off a good asset of 900m value to get back only 700m, I see that as a 200million dollar loss.

If they really need the 700m spare cash it would be better to use the property to secure a loan.

(20-06-2013, 08:45 PM)BlueKelah Wrote: I think most people only look at income in this yield hungry environment and forgot to factor in something else.

Even though net income takes a small hit, so profits are ok, you are forgetting that SPH has taken a bigger hit in the form of loss of NAV

If appraised value is 3billion and ownership is only 70%, the leftover 30% sold to public is actually worth ~900million.

So SPH partially sold off a good asset of 900m value to get back only 700m, I see that as a 200million dollar loss.

If they really need the 700m spare cash it would be better to use the property to secure a loan.

Er...not sure on the lose of $200 million?

Base on presentation below pg 6, gross proceeds is approx S$1048 million. This is on top of S$900 million transfer of debt.

http://info.sgx.com/webcoranncatth.nsf/V...D0029347E/$file/EGMSlides18June2013.pdf?openelement

(20-06-2013, 08:45 PM)BlueKelah Wrote: I think most people only look at income in this yield hungry environment and forgot to factor in something else.

Even though net income takes a small hit, so profits are ok, you are forgetting that SPH has taken a bigger hit in the form of loss of NAV

If appraised value is 3billion and ownership is only 70%, the leftover 30% sold to public is actually worth ~900million.

So SPH partially sold off a good asset of 900m value to get back only 700m, I see that as a 200million dollar loss.

If they really need the 700m spare cash it would be better to use the property to secure a loan.

I don't think this is accurate. NAV will increase substantially since the properties are being sold at a price greater than its book value. On pg 19, its states the FY 2012 NAV will increase from $1.39 to $2.27.

Granted, in terms of RNAV, there will be minimal change since there is an exchange of partial stake in real property for liquid REIT units. Though it must be noted that SPH still retain its 999 year interest - it only sold a 99 year lease to the REIT so eventually the asset will revert back to it but we will all be dead by then.

Essentially, this deal is wonderful for SPH as it still retains control over the property, it earns similar level of profit as before BUT it walks away with a sizable cash hoard which could be deployed to new investments. Let's not forget that the debt is now held by the REIT and not SPH. I don't see how a 'loss' is brought about.

(Not Vested)

Having the cake and eating it too will have to wait...

Singapore Publisher Delays REIT Offering

(24-06-2013, 10:19 PM)swakoo Wrote: Having the cake and eating it too will have to wait...

Singapore Publisher Delays REIT Offering

Haha, looks like the baker is not producing any more goods

this sounds like very bad news, i expect heavy selling on sph tomorrow
good luck to shareholders that were waiting for the big dividends, not coming ya

The news seems to be out. SPH price had been dropping steadily ever since the EGM. I was wondering why... Now I get the answer.

(24-06-2013, 10:19 PM)swakoo Wrote: Having the cake and eating it too will have to wait...
Singapore Publisher Delays REIT Offering

(24-06-2013, 10:44 PM)BlueKelah Wrote: Haha, looks like the baker is not producing any more goods

Admirer would say that SPH is a smart baker. Dun sell cake when there is no market for it.

Detractors would say that SPH is a lousy baker. No confident to sell its own cake.

Are you an admirer or detractor?

Personally, I'm glad they are postponing. I would be happier if they shelved it indefinitely. (Vested)

Delay another year.

Then, maybe can even include Seletar Mall in the IPO.