BRC Asia

[valuebuddies]

I trust that most of us in this forum understand the difference between convertible bonds and equity, so there is no point to argue on the pros and cons. But if the bond issue is something positive to the shareholders, wouldn't the share price increased after the announcement?

And see below as quoted from the 2013 AR:

The Group’s exposure to market interest rates arises from its term bank loan which bears interest at 1.35% above SIBOR.

Also considering that it has S$19M cash as of March 2014 and gearing not at excessive high level, why would the company so desperately seeking financing at a rate of more than twice of what it normally pay?

The only answer that I can give is:

There is this group of interested investors, some maybe related to each other or other major shareholders, who like to invest in BRC. However, they are also wary of the current market situation. So, the best way for them to start investing in the company is to issue them convertible bonds, as they refuse to take in the shares. As they are buying in bulk, as usual, the company offer them a discount on the conversion price. So now, the company is happy, as they have some big investors in the company, and the investors are happy that they invested in the company. Win-win for them. So... who are the losers?

$500,000 big? I think there are many more retail investors with similar purchasing powers, but why they are not given chance in the first place. Do you mean that any retail investor could write in to request for 5% bond issue convertible at a discount price if they have $500,000 or more to invest?

Obviously, I don't have such amount of money, my average holding per company is only 4 digits

[NTL]

I trust that most of us in this forum understand the difference between convertible bonds and equity, so there is no point to argue on the pros and cons. But if the bond issue is something positive to the shareholders, wouldn't the share price increased after the announcement?

And see below as quoted from the 2013 AR:

The Group’s exposure to market interest rates arises from its term bank loan which bears interest at 1.35% above SIBOR.

Also considering that it has S$19M cash as of March 2014 and gearing not at excessive high level, why would the company so desperately seeking financing at a rate of more than twice of what it normally pay?

The only answer that I can give is:

There is this group of interested investors, some maybe related to each other or other major shareholders, who like to invest in BRC. However, they are also wary of the current market situation. So, the best way for them to start investing in the company is to issue them convertible bonds, as they refuse to take in the shares. As they are buying in bulk, as usual, the company offer them a discount on the conversion price. So now, the company is happy, as they have some big investors in the company, and the investors are happy that they invested in the company. Win-win for them. So... who are the losers?

$500,000 big? I think there are many more retail investors with similar purchasing powers, but why they are not given chance in the first place. Do you mean that any retail investor could write in to request for 5% bond issue convertible at a discount price if they have $500,000 or more to invest?

Obviously, I don't have such amount of money, my average holding per company is only 4 digits

That's why I said "maybe related".

In business, relation can mean alot of things.

[mrEngineer]

Interesting.. I wonder what is BRC Asia raising 10 million for when construction business in Singapore seems going for a slowdown.. Perhaps precast?

[Shrivathsa]

From BRC Announcements : The Board of Directors (the “Board”) of BRC Asia Limited (the “Company”) refers to its
announcements dated 23 April 2014, 8 May 2014 and 16 May 2014 in relation to the issue by the
Company of S$10,000,000 in aggregate principal amount equity-linked redeemable convertible bonds
(the “Bonds”). The Board wishes to announce that the total net proceeds of S$10 million from the issue of the Bonds
has been used to pay off part of the Company’s existing trust receipts. This is in accordance with the
intended use of the net proceeds as described in the announcement dated 23 April 2014

[valuebuddies]

Finally long waited results is out: http://infopub.sgx.com/Apps?A=COW_CorpAn...HXPcckZ7qA

Not good as expected, lack of special div this year make it less attractive.

[Shrivathsa]

If one looks at trailing one year pay-out at current price of 17.5 cents, it translates to 1.3 cents i.e. 7.42% yield.

However, yes, there are going to be disappointed investors who get out.

Which happened today, with high volumes, sliding down to 16.9 cents, before one lot was transacted right at the end at 17.04 pm.

[Raks]

If one looks at trailing one year pay-out at current price of 17.5 cents, it translates to 1.3 cents i.e. 7.42% yield.

However, yes, there are going to be disappointed investors who get out.

Which happened today, with high volumes, sliding down to 16.9 cents, before one lot was transacted right at the end at 17.04 pm.

I have divested when I saw questionable convertible bond (at least to me, a retail investor). Not so much about their profitability or business model.

In general, precast should have great potential - this 3 years at least in singapore and probably the foreseeable future in south east asia.

[valuebuddies]

It has been in my watchlist for so long, at least I am going to fire my armor when I see below 15c

[Shrivathsa]

So far, no sign of breaching 17 cents, or rather 16.9 cents.

Is back up to 18.2 cents.

Chances are that the next trough will be after it goes ex dividend.

If it stays at around 19 cents by the time it goes ex dividend, then maybe it will go to 15 cents, assuming a similar peak to trough decline of 5 cents like last year from 22 to 17 cents.

One can wait and see what happens in 2015.

[valuebuddies]

Result is out:

http://infopub.sgx.com/FileOpen/BRC_1Q15...eID=334518

Not vested but sideline for opportunities...