Fung Choi Media Group

(11-09-2014, 07:25 PM)Volmax Wrote:

(11-09-2014, 06:29 PM)propertyinvestor Wrote: They have trade payables amounting to 1400HKD million plus existing bank loans of around 577HKD millions which I assume needs to be paid on time too.

Alot will depend on the company's ability to collect debts from their customers

How much is the 9% Bond quarterly interest?


[Image: VNp1rAK.png]

3M USD per annum or 23.3M HKD per annum or almost 6M HKD per quarter.

F&N has already written off Fung Choi... it is a historical legacy and the stock has been forgotten for a long time.

Odd Lots Vested
GG

(11-09-2014, 10:54 PM)greengiraffe Wrote: F&N has already written off Fung Choi... it is a historical legacy and the stock has been forgotten for a long time.

Odd Lots Vested
GG

So its no longer on FNN books? The accounts of Fung choi are not consolidated into FNN?

(11-09-2014, 10:56 PM)propertyinvestor Wrote:

(11-09-2014, 10:54 PM)greengiraffe Wrote: F&N has already written off Fung Choi... it is a historical legacy and the stock has been forgotten for a long time.

Odd Lots Vested
GG

So its no longer on FNN books? The accounts of Fung choi are not consolidated into FNN?

I got no clue on that but as a prudent company, with value collapsing, should be long gone...

It is just an associate to FNN, so only equity accounting is required, if the value derived from equity accounting is greater than the fair market value, it will be conservative to provide sufficient impairment loss to close the gap. Why would FNN fully write off the investment where it is still possible for them to dispose via exchange or otc?

Fung Choi still have assets in the company. Its surprising they didnt disclose their involvement in the Guangzhou industrial park development. I wonder if FNN is aware of this.

Correct me if I'm wrong but i dont think FNN writing off Fung Choi (if it did) has any bearing on whether the latter is consolidated or equity accounted

IMO, writing off a subsidiary is only affecting the company level but nothing on the consolidation level , as being the majority shareholder, one should assume it's responsibilities over the net liabilities of the subsidiary even already exceeding the cost of investment.

For associated company, usually equity accounting is applicable and that means any increase in value of the investment in associated company (due to accounting of the sharing of associate profit) would result in increase in the profit of the group. Any impairment loss can be proposed on the consolidation level, and thus affect the group p&l.

More information on the bondholders

http://www.bcabusiness.co.uk/


They really play hardball with Fung Choi

(12-09-2014, 07:09 AM)valuebuddies Wrote: IMO, writing off a subsidiary is only affecting the company level but nothing on the consolidation level , as being the majority shareholder, one should assume it's responsibilities over the net liabilities of the subsidiary even already exceeding the cost of investment.

For associated company, usually equity accounting is applicable and that means any increase in value of the investment in associated company (due to accounting of the sharing of associate profit) would result in increase in the profit of the group. Any impairment loss can be proposed on the consolidation level, and thus affect the group p&l.

The subsidiary I assume is a limited liability company. The parent don't have to commit more capital if they don't want to. But usually people ascribe the possibility of parent bailing out the sunsidiary, so there is a certain amount of reputational risk involved, but technically no legal credit risk beyond the cost of investment

Whether it affects the consolidated level depends on which entity the reval takes place, capital or income in nature, and associate or subsidiary or investment.

As discussed previously, a consolidated company only exist in the accounting world, not in the real or legal world:
http://www.valuebuddies.com/thread-4123-...l#pid88193