China Merchants Holdings Pacific

[CityFarmer]

The Company risk profile will change after this M&A deals reaches completion. There are substantial debt exceeding HK$10 billion, loss-making toll roads, potential slowdown in the Chinese economy. A far cry from the HK$1 billion net cash company when I first invested.

(Vested)

I am not sure on the debt level. Based on my source, the total debt (ST + LT debts), up to 2Q15, was about 0.65 billion HK$. How to arrive at a total debt of exceeding 10 billion HK$, after the acquisition, and with the right issue proceeds?

(vested)

http://www.cmhp.com.sg/resources/ck/file...281%29.pdf - pg 5

Total Debt exceeds HK$4 billion (exclude dividend payable to Easton) as of 2Q 15.

OK, I misquoted the number in HK$. The shareinvestor.com is using SGD instead. S$0.65 billion, is 3.6 billion HK$ with today rate. I am not sure the rate used by the site, but it should be more and less tallied.

How about the total debt of exceeding 10 billion HK$, after the acquisition?

(vested)

[greengiraffe]

Updates From HJ:

http://www.hj.net.cn/second/content.aspx?nodeid=31&page=ContentPage&contentid=2065



HJ noted CMP interims



展望未来，招商局亚太执行主席兼首席执行官罗慧来先生说到：“我们依然看好中国收费公路业务的前景，并期待其继续创造强劲业绩。”


Optimistic on outlook for China toll roads... looking forward to sustaining strong growth



http://www.hj.net.cn/second/content.aspx?nodeid=31&page=ContentPage&contentid=2067





http://www.hj.net.cn/second/content.aspx?nodeid=31&page=ContentPage&contentid=2068



HJ interim review involving key mgt staff


对李建红董事长提出的“五个能力”以及李晓鹏总经理提出的“六个更加注重”进行了重点学习和布置。



review focus handed down by CMI top bloke Li JianHong - 5 strengths and 6 focus areas



指出招商公路目前面临“机遇与挑战并存”的复杂局面，全体员工必须进一步增强机遇意识、忧患意识和进取意识，正确对待各种困难、压力和挑战，努力开创发展的新局面



Entire HJ Gp faces opportunities amidst challenges and uncertainties and hence entire company must adopt a focus and nimble approach to face the challenges and pressure in order to create and take on new opportunities



重点做好六个方面的工作：一是完成广西新项目的交割及后续工作，实现平稳过渡，通过植入招商公路的管理流程、运作机制和企业文化，提升项目运营能力；二是通过挖潜增效，增收节支，确保超额完成全年经营指标；三是紧紧围绕“规模最大、管理最强、效益最好、品牌最优”的标准，做好“十三五”战略规划的编制工作；四是开展创新经营，不断在服务区经营方面培育新的利润贡献点；五是顺利完成“迎国检”工作；六是继续加强安全生产管理，坚决杜绝各类安全生产责任事故的发生。



6 focus areas

i) complete Guangzi acq and ensure smooth integration ii) raised pdtivity to achieve targets via rev growth and costs containment iii) efficient mgt and brand bldg iv) explore new opportunities while lifting efficiency of core v) complete tasks for/on national review vi) lift safety records





http://www.hj.net.cn/second/content.aspx?nodeid=31&page=ContentPage&contentid=2069

Internal meeting focusing on pending Guangxi acq: 邓仁杰副总经理听取了广西项目股权收购工作进展情况、新项目投资以及创新业务开展情况的汇报，并就招商公路项目收购后续工作、创新业务发展等方面同与会人员进行了交流。他指出，招商公路要充分考虑项目收购的不确定性因素，规避投资风险；同时，要不断提高“互联网+”创新意识，深入研究公路业务创新模式，为社会提供有价值的公路出行服务。

http://www.hj.net.cn/second/content.aspx?nodeid=31&page=ContentPage&contentid=2097




Gp integrity meeting - v communist

Other Gp Investee Meetings:

met shenzhen exp mgt team on 5 Aug





罗慧来董事总经理对胡伟董事长一行的到访表示欢迎，对深高速近年来的经营情况及未来发展思路表示认可，期望深高速在科学合理的战略规划指引下，继续有序推进各项业务，持续提升管理水平和盈利能力。招商公路将一如既往地做好股东决策，全力支持企业依法合规经营与发展。




acknowledge performance of SZ Exp in recent years and hope that SZ will continue to adopt a scientific approach fir future toll developments. As a strategic holder, HJ looks forward to support SZ growth in a legal and legitimate manner

met JiangSu Exp mgt




http://www.hj.net.cn/second/content.aspx?nodeid=31&page=ContentPage&contentid=2073

[CityFarmer]

The acquisition should be comfortably funded by the proceeds from the right issue and internal resources. Few basic numbers below

Net proceeds from right issue    : S$633 million, or HK$3507 million
Considerations of the acquisition : HK$3834 million
Cash reserve (as of 2Q15)         : HK$1359 million

Source: http://infopub.sgx.com/FileOpen/Preferen...eID=362606

I reckon the recent S$350 million loan facilities is a bridging loan, and will be paid off with proceeds from right issue. The net gearing will be reduced with enlarged equity, after the acquisition to a comfortably 30%+

All comments are welcomed

(vested)

[Nick]

The acquisition should be comfortably funded by the proceeds from the right issue and internal resources. Few basic numbers below

Net proceeds from right issue    : S$633 million, or HK$3507 million
Considerations of the acquisition : HK$3834 million
Cash reserve (as of 2Q15)         : HK$1359 million

Source: http://infopub.sgx.com/FileOpen/Preferen...eID=362606

I reckon the recent S$350 million loan facilities is a bridging loan, and will be paid off with proceeds from right issue. The net gearing will be reduced with enlarged equity, after the acquisition to a comfortably 30%+

All comments are welcomed

(vested)

This finances the equity portion of the M&A. We will still be assuming the underlying debts held by the M&A Targets. So the overall debt in the Group will exceed HK$10 billion.

http://infopub.sgx.com/FileOpen/Preferen...eID=362606 - pg 9.

[CityFarmer]

The acquisition should be comfortably funded by the proceeds from the right issue and internal resources. Few basic numbers below

Net proceeds from right issue    : S$633 million, or HK$3507 million
Considerations of the acquisition : HK$3834 million
Cash reserve (as of 2Q15)         : HK$1359 million

Source: http://infopub.sgx.com/FileOpen/Preferen...eID=362606

I reckon the recent S$350 million loan facilities is a bridging loan, and will be paid off with proceeds from right issue. The net gearing will be reduced with enlarged equity, after the acquisition to a comfortably 30%+

All comments are welcomed

(vested)

This finances the equity portion of the M&A. We will still be assuming the underlying debts held by the M&A Targets. So the overall debt in the Group will exceed HK$10 billion.

http://infopub.sgx.com/FileOpen/Preferen...eID=362606 - pg 9.

OK, I got it. Thank you very much

Based on a gearing formula of total debt over equity, the gross gearing will be around 80%-90%, depending on CB conversion. It is not an alarming level with the company biz model, but definitely not a comfortable level.

(vested)

[greengiraffe]

http://infopub.sgx.com/FileOpen/Cancella...eID=366610

ANNOUNCEMENT

CONVERTIBLE BONDS DUE 2017 -

CANCELLATION OF BONDS DUE TO CONVERSION

The board of directors (the “Board”) of China Merchants Holdings (Pacific) Limited (the “Company”) wishes to announce that HK$20,000,000 in aggregate principal amount of HK$1,163,000,000 1.25 per cent. convertible bonds due 2017 (credit enhanced until 2015) (the “Convertible Bonds”) have been converted and cancelled pursuant to the exercise of conversion rights by the holder thereof (the “Conversion”). Accordingly, following such conversion and cancellation, the aggregate principal amount of the Convertible Bonds remaining outstanding as of 24 August 2015 is HK$339,000,000.

Arising from such conversion, 4,068,317 new ordinary shares in the capital of the Company (“Shares”) have been issued at the conversion price of S$0.776 and the total number of issued and paid-up Shares of the Company has increased to 1,196,349,400.

BY ORDER OF THE BOARD

Lim Lay Hoon

Company Secretary
Singapore, 24 August 2015

Based on outstanding HK$339m worth of CBs, the potential shares to be converted at $0.776 is 68.957m.

http://infopub.sgx.com/Apps?A=COW_CorpAn...Easton.pdf

This is the last updated paid up capital of CMP before PO

So the PO will be 598,174,700 shares that will raise S$598,174,700 before expenses

Total share capital of CMP will be lifted to 1,794,524,100 shares.

CM HJ owns 764,814,750 shares before PO and is likely to end up with 1,362,989,450 shares post PO or 75.95% of enlarged share cap before further conversion of CBs

Vested
Core Holdings
GG

http://infopub.sgx.com/Apps?A=COW_CorpAn...cement.pdf

GG brains still quite clear... actual # of new shares are spot on.

Still got 1.1+m of loyal die hards... including GG's odd lots excess applications of 195 for write off...

So CM HJ backed to 75.88%... how prosperous...

Vested
Core
GG

[CityFarmer]

The free float has gone down to 14-15%, after the right issue.

(vested)

[greengiraffe]

http://infopub.sgx.com/Apps?A=COW_CorpAn...letion.pdf

On the date of the completion of the rights issue or shortly after the fund raising, CMP completed the purchase of Yangping - the worst of the proposed 3 roads...

So far there remains no update on the remaining 2 profitable roads - Guixing and Guiyang.

Hopefully, the "delay" the completion of the intended acquisitions are due to the golden week National day holidays in middle kingdom and nothing more...

Overly Concerned
GG

[greengiraffe]

http://www.chinafile.com/multimedia/info...aking-toll

China’s New Roads Are Taking a Toll

If Toll Payments Are So High, Why Is China’s Highway System Strapped for Cash?

• September 29, 2015
  

Very interesting links.... unfortunately can't cut and paste due to too many graphs

[CityFarmer]

http://www.chinafile.com/multimedia/info...aking-toll

China’s New Roads Are Taking a Toll

If Toll Payments Are So High, Why Is China’s Highway System Strapped for Cash?

• September 29, 2015
  

Very interesting links.... unfortunately can't cut and paste due to too many graphs

Very good sharing, thanks GG.

I have edited the link, to make it click-able.