Ocean Sky International

[ngcheeki]

Placement share will start trading on tomorrow 9 am. Will the share price correct or increase?

http://info.sgx.com/webcoranncatth.nsf/V...00049BA10/$file/OSIL_Listing_and_Quotation_Announcement.pdf?openelement

[cif5000]

You know, it is good to see a long wait finally paid off. The dividends received while waiting were good. Depending how you looking at it, the yield was somewhere between 8-16%, comparable to the leveraged REIT and Telco, although the skipping of the final dividend was somewhat disappointing.

Ironically, the latest 4Q result was the worst since the Cambodia fire and yet the share price shot up with a share placement announcement. If anyone can recall, Sing Lun was privatized at a PB of ~2. Why should OSI trade at a PB of 0.5? Indeed, it corrected to about a PB of 1. (Why PB? Ans:____________)

GAP was big for OSI but its dependency has been steadily decreasing. Further, looking at their payments and other ratios, GAP needed OSI as much as OSI needed GAP. As cotton price became volatile, GAP share price suffered and at a certain level, it provided a "free hedge" on OSI, just like Ban Leong against the proliferation of chain IT stores. Overall, it was a very fun and rewarding investment operation.

My biggest question remained, "why are the brothers not with the sister?"

[Image: z?s=O05.SI&t=2y&q=l&l=on&z=m&a=v&p=s&lan...&region=SG]

[sgmystique]

Woops...its just 2.30 PM and Ocean Sky has already traded in excess of 53000 lots. That's appreciably more than 10% of the total number of shares. The interesting part is that such huge volumes have resulted in just a S$0.006 change in the share price. I am not very sure of what this means.

And looking back into the very near past OS hardly used to trade even 100 lots per day...The market does throw up a lot of interesting new events for all of us to chew upon...

[john]

I too am still amazed by the sudden and huge surge in price/volume, altho agree 0.16 prior placement announcement is a steal, based on its 2011 result. Cif5000 says price also surged in 2007 shares placement, but then there was a plausible reason: acquiring Bloom Trading. This time no named target and management only 'exploring' acquisition etc. And how much can u do with a mere US3mil anyway? As a shareholder, think fair price is bet 0.20-0.24 even if the 'exploring' comes to naught.

[sgmystique]

I am not very clear on the implications of the announcements that Ocean Sky has made regarding the change in their business.

Any helpful inputs would be most welcome...

MOU : (A) PROPOSED ACQUISITION OF CHIWAYLAND GROUP; AND (B) PROPOSED DISPOSAL OF EXISTING BUSINESS

http://info.sgx.com/webcorannc.nsf/Annou...endocument

[ValueBeliever]

I am not very clear on the implications of the announcements that Ocean Sky has made regarding the change in their business.



http://info.sgx.com/webcorannc.nsf/Annou...endocument

Understood only Chiwayland injection - which effectively increase the nos shares and net impact is EPS guarantee of S$1.5cents for 2012. Thus no change on Earnings and PE ratio.

However, the second part calls for capital reduction on the part of majority shldrs interest - does it mean?

1) Major shldrs will dilute its own interest in Ocean sky by taking cut in the stake to pay for the Ocean sky existing business?

If 1) is yes, then how the minority shldrs suppose to get? More shares? after existing major shldrs reduce its stake?

As cash remain is no less than 25mil it ties in that Ocean sky - major shldrs will pay for the business by completely cancel out their equity in the Co.

There should be no change in Minority? Correct? My believe is also the sweetener to the deal of Arranger fees of 37mil shares is probably ??? but who is the Arranger? The Ang or the chinese - really world class stock exchange SGX!!

[john]

The pposed reverse takeover cum selling coy to the Angs does'nt look good to the minority shareholders. What to do? Can the SIC assist? I see that the takeover party, Sinway, is under an obligation to make a general offer for all the remaining shares in the capital of OSky not already owned, controlled or agreed to be acquired by them pursuant to Rule 14 of the Code. As such, Sinway will be seeking a waiver from such obligation to make a mandatory general offer under Rule 14 of the Code from SIC. If SIC refused waiver, Sinway has to make the same offer to the minority shareholders. What do you think? Can minority shareholders make representation to the SIC?

[dydx]

Based on the suddenness of the recent not very well conceived, lowly priced (vs. the lastest NAV/share) share placement which raised only approx. $3.0m - probably just enough to pay for the professional fees for the proposed RTO deal - and the suddenness of the proposed RTO deal itself, I think minority shareholders of Ocean Sky should have quite many questions to ask the controlling shareholders and EDs - Ang brothers - and the IDs in the coming AGM.

Frankly, I am not sure at all the Ang brothers being rather simple apparel people are experienced enough to structure and negotiate a good RTO deal with a decent party to inject a promising new business into Ocean Sky and coming in as the new management to take the company to greater heights as a listed enterprise. I suspect there must be 1 or more advisors or 'marriage brokers' behind this deal, and it will be useful and interesting to find out more about them, especially their background and character.

Quite obviously, ChiwayLand Group as the incoming party in the proposed RTO deal is more interested in Ocean Sky's existing net cash reserve which amounted to approx. USD17.5m as at 31Dec11, and the prospect of raising more fresh capital to fund its PRC-based property development business. The fact that the seller of ChiwayLand Group is prepared to accept new Ocean Sky shares as consideration pegged to a proposed exchange price of $0.335/share - which is substantially higher than the $0.20 level market price for the Ocean Sky share before the RTO deal was announced mid-day 2Apr12, and the latest (as at 31Dec11) per share NAV of USD0.1672 (equivalent to approx. $0.21) of the Ocean Sky share - makes me wonder if the seller is stupid or desperate, or both?

Under the Proposed Restructuring which is an integral part of the proposed RTO deal, the Ang brothers will buy Ocean Sky's existing apparel manufacturing business and related assets/liabilities for a max. $63.0m to be satisfied by way of a selective capital reduction - i.e. the Ang brothers shall simply 'pay' for it by cancelling their Ocean Sky shares. My rough calculations show $63.0m is about 93% of Ocean Sky's 31Dec11 NAV of USD71.04m less the USD17.5m of net cash. A relevant question: Should the Ang brothers be allowed to take out the profitable apparel manufacturing business and related assets/liabilities at such a low valuation? Why shouldn't the Ang brothers be prepared to pay a fair premium over the corresponding NAV of the business and the related assets/liabillities??

Frankly, I will be quite surprised if this RTO deal would be allowed to go through smoothly on the stated terms!

[john]

Thanks for your valuable insights

It seems to me that minority shareholders are abt to be robbed of their lucrative apparel biz and forced to be in bed with an S-Chip which we know nothing abt. As u said, the Ang bros, if they want the whole apparel biz to themselves, sud simply buy out the minority shareholders. Instead, they are now trying to do a very great injustice to their loyal shareholders. How can the regulators allow such a thing to happen?

Based on the suddenness of the recent not very well conceived, lowly priced (vs. the lastest NAV/share) share placement which raised only approx. $3.0m - probably just enough to pay for the professional fees for the proposed RTO deal - and the suddenness of the proposed RTO deal itself, I think minority shareholders of Ocean Sky should have quite many questions to ask the controlling shareholders and EDs - Ang brothers - and the IDs in the coming AGM.

Frankly, I am not sure at all the Ang brothers being rather simple apparel people are experienced enough to structure and negotiate a good RTO deal with a decent party to inject a promising new business into Ocean Sky and coming in as the new management to take the company to greater heights as a listed enterprise. I suspect there must be 1 or more advisors or 'marriage brokers' behind this deal, and it will be useful and interesting to find out more about them, especially their background and character.

Quite obviously, ChiwayLand Group as the incoming party in the proposed RTO deal is more interested in Ocean Sky's existing net cash reserve which amounted to approx. USD17.5m as at 31Dec11, and the prospect of raising more fresh capital to fund its PRC-based property development business. The fact that the seller of ChiwayLand Group is prepared to accept new Ocean Sky shares as consideration pegged to a proposed exchange price of $0.335/share - which is substantially higher than the $0.20 level market price for the Ocean Sky share before the RTO deal was announced mid-day 2Apr12, and the latest (as at 31Dec11) per share NAV of USD0.1672 (equivalent to approx. $0.21) of the Ocean Sky share - makes me wonder if the seller is stupid or desperate, or both?

Under the Proposed Restructuring which is an integral part of the proposed RTO deal, the Ang brothers will buy Ocean Sky's existing apparel manufacturing business and related assets/liabilities for a max. $63.0m to be satisfied by way of a selective capital reduction - i.e. the Ang brothers shall simply 'pay' for it by cancelling their Ocean Sky shares. My rough calculations show $63.0m is about 93% of Ocean Sky's 31Dec11 NAV of USD71.04m less the USD17.5m of net cash. A relevant question: Should the Ang brothers be allowed to take out the profitable apparel manufacturing business and related assets/liabilities at such a low valuation? Why shouldn't the Ang brothers be prepared to pay a fair premium over the corresponding NAV of the business and the related assets/liabillities??

Frankly, I will be quite surprised if this RTO deal would be allowed to go through smoothly on the stated terms!

[ValueBeliever]

SGX is now known for RTO as it is with S chip crooks! So the crooks now think of new idea to find their way into SGX.

Dont be fooled by RTO, if it is such a great deal why choose SGX. Obviously the Angs know that they are getting out of a unappreciated Singapore listed Co. despite paying dividend way above interest in banks.

The sad state we are in our SGX is due to no other than wrong policy!!

I sometimes look at the top trading volume could feel hurt truely as Singaporean feel sorry for the state of our SPORE Inc. How is it that we have ended in this sorry state.

We took short cuts not to grow our own industry period. We trust foreigners to manage our own money. I think we should have helped our local industry instead of pouring our money in foreign Co. listing here. for every Petra or Hsu Fu Chi that we managed to list - 80% goes to crooks!

Such is the risk of foreign Co. particularly S chip - their reputation is by default questionable!! I use the term "Crooks" and do not feel any sorry for it as there is no possibility to prosecute or re-course for shdrs that have suffered because so many minority have lost money investing in S chip and SGX is not able to do anything about it except to let such Co do RTO with no credible plan? We are dome in SGX unless we do proper due diligence on Co. which up to now is "very questionable intention" ie. who benefit from listing S chip?