SC Global Developments

[ngcheeki]

Trading halt. Perhaps, any another investment plan or expansion plan coming up since the last one was terminated.

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

[cyclone]

Voluntary unconditional cash offer of $1.8 per share.
Quite generous compared to other cash offer. Congratulation to those vested.
-------------------
The highest premium offered for a real estate company in Singapore in
the past five years based on the premium over the following benchmarks:
o 49.4% to its last traded price as at 30 November 2012;
o 57.2% to its 1-month volume weighted average price (“VWAP”);
o 71.1% to its 12-month VWAP,

A premium of 39.5% to the highest closing price for the Shares in the last
12 months of S$1.290

[godjira1]

Congrats. I see this counter no up but i was wrong.

[money]

Congrats. I see this counter no up but i was wrong.

well you may not be wrong, the offeror may just have a different point of view. In fact, i dont think it is a wise way to use money in this manner, but at the very least, i think the offeror has been quite fair to minority shareholders to offer to buy back at around 15-20% above book value. Cheers to SC

(not vested)

[Caelitus]

I am vested in this counter at an average cost of $1.45. A couple of days before trading halted, I was trying to add to this counter. Alas, I did not manage to. However, the offer price of $1.80 allows me to exit with a nice bonus. Now it is to sit and wait to see if the acceptances come in at nice rate (refer Wheelock) or the offeror has to revise the offer.

[ngcheeki]

Report from AmFraser Research this morning.
https://www.amfraser.com.sg/gcsg/downloa...121206.pdf

SC GLOBAL: PRIVATIZATION OFFER AT S$1.80
PrivaƟzaƟon offer at S$1.80, ~50% premium to last close. Mr. Simon
Cheong, current Chairman and CEO of SC Global, made an
uncondiƟonal cash offer for SC Global at S$1.80 per share, which is
at 49.4% premium to last close of S$1.205 on 30 Nov 2012. The offer
price is also 15.4% above the unaudited net asset value as at end Sep
2012. Mr. Cheong already owns 55.06% of SC Global. We view this
management buyout exercise as a strong sign of confidence in SC
Global’s prospects.
PrivaƟzaƟon offer is Ɵmely; SC Global lacks catalysts to unlock
share value otherwise. Sales have been moving slow, and inventory
hangovers of its high‐end properƟes is a key concern at SC Global.
Projects such as Hilltops in Cairnhill Circle and The Marq on Peterson
Hill have clocked low take‐up rates of only 18.7% and 50.0% as at
end of Oct 2012, despite having been completed for more than a
year. The slow moving sales have been weighing down on net cash
flows, which were negaƟve for the year so far.
Accept—offer price of S$1.80 is close to our FV of S$1.98. We value
SC Global at RNAV, which we esƟmate to be S$1.98. Even though the
offer price is 9% lower than our FV, the offer sƟll presents a rare
opportunity to unlock value for current shareholders. Considering
the very low likelihood of potenƟal counterbids, we advocate that
shareholders take up the offer and realize the value on their SC
Global investment.

---

The following is another informative report from L&T.

SC GLOBAL
S$1.205-SCGD.SI
 Founder Simon Cheong (SC) is “generous”,
launching a voluntary unconditional offer at
$1.80 a share to privatize his namesake company,
which was previously known as ANA Hotels with
DBS Land (before being renamed CapitaLand) and
Kua Peck Long as controlling shareholders. SC
bought into it in 1999. (SC last bought almost 5 mln
shares in September at $1.05 each.)

 The offer is:
i. 49% above the last traded price;
ii. double the low of after the loss warning relating
to AV Jennings in July;
iii. 15% above Sept ’12 NAV of $1.56 a share.

 We believe the move may have been necessitated by
the following factors:
a. several of SC Global’s long completed
projects - the Marq, Hilltops, 7 Palms, have
simply stalled. SC Global is sitting on $2
bln worth of inventory! 10% penalty = $200
mln; 48% (if not sold 3 years after TOP =
almost $1 bln!
b. no signs the government would lift the rule
that all residential projects have to be sold
2 years after obtaining TOP, and all
completed units have to be sold and cannot
be rented out.

 It is not clear what is Wheelock’s stance regarding
its 15% stake (65.5 mln shares), the bulk of which
was bought at no lower than $2.30 a share (albeit
not adjusted for rights issue). The lowest of 48.5 cents
was in respect of 7.35 mln shares bought in during the
Financial Crisis in Oct ’08.

 SC does not intend to maintain listing status of the
company, ie it will exercise right to compulsory
acquisition of remaining shares once he crosses 90%.

 With SC owning 227.75 mln shares or 55.06% of the
company’s issued cap of 413,637,481 shares, the
exercise will cost SC $334.6 mln.

 We do not believe there are other property
companies in the same boat as SC Global in
terms of unsold homes.

 Shareholders who accept the offer will be paid within
10 days of acceptance. There is urgency to do so just
yet.

[old friend]

I am vested in this counter at an average cost of $1.45. A couple of days before trading halted, I was trying to add to this counter. Alas, I did not manage to. However, the offer price of $1.80 allows me to exit with a nice bonus. Now it is to sit and wait to see if the acceptances come in at nice rate (refer Wheelock) or the offeror has to revise the offer.

Congrats!

[greengiraffe]

Mr Market seems to think that there is more life to SC Global ongoing voluntary delisting offer.

There was an article by veteran journalist Conrad Raj as well:

http://www.todayonline.com/Commentaryand...lexibility

Cheong seeks to buy time, gain flexibility

by Conrad Raj
04:45 AM Dec 08, 2012
Property developer Simon Cheong Sae Peng has always been known for being unconventional and his approach has served him well, allowing the 55-year-old to build himself a niche in the ultra-luxurious sector of the market and pocket a tidy fortune along the way.

Even so, his decision to take his company, SC Global Developments, private came as a surprise to many. Few thought that Mr Cheong, who already owns 55.06 per cent of the company, had the resources to carry out such an exercise. Buying out his remaining shareholders will cost him some S$335 million.

In light of this, it is worth examining in greater detail some of the factors that may have led him to take this step.

Like most property companies, SC Global trades at a steep discount to its revalued net asset value (RNAV) and with the low liquidity of its shares in the stock market, Mr Cheong has found a listing on the Singapore Exchange unnecessary.

Developer Wheelock Properties Singapore owns some 15.9 per cent of the company and taking into account other holdings, SC Global's free float is estimated at 22 to 23 per cent.

The stock price has been fairly volatile, with Wheelock having paid as much as S$3 - it was S$6 then but a stock split came along the way - for its initial 10 per cent stake in June 2007. In the aftermath of the global financial crisis, the stock hit as low as S$0.31 in March 2009.

While Mr Cheong's offer price of S$1.80 a share appears generous, being a whopping 49 per cent higher than the pre-offer last traded price of S$1.205, it is less than half the RNAV of S$3.65 a share, according to DMG securities analyst Goh Han Peng.

That aside, there are other reasons which may have prompted the move.

For one, time is running out for SC Global in its race to sell the remaining apartments at its completed projects such as The Marq on Paterson Road and Hilltops at Cairnhill Circle, Mr Goh pointed out.

Under the Residential Property Act, housing developers whose shareholders and directors are not all Singaporeans have to sell their units within two years of completion. They are not allowed to rent out unsold units.

If SC Global fails to beat the clock, the company faces extension charges of up to 24 per cent of the land cost, which could run into tens of millions of dollars.

As Mr Cheong is a Singaporean, "taking the company private at this stage will enable it to side-step the fee penalty", noted Mr Goh. He added: "SC Global has been able to establish benchmark pricing for its luxury residential projects and is known to be reluctant to cut prices to move sales, given its belief in the quality of its projects and the high replacement cost of replenishing its land bank."

Mr Cheong has himself admitted that taking his company private would enable its management to have greater flexibility to manage and plan its residential property business. He has built a global reputation for his ultra-luxurious homes, and it would probably be easier for him to access capital on his own from financial institutions without having shareholders to answer to.

Sound business reasons, then, for his buyout move.

But there are also others, and these should be of some concern to the Singapore Exchange.

As Mr Cheong explained, being relieved of the burden of reporting SC Global's performance on a quarterly basis, as well as shedding expenses related to a public listing, will enable the company to channel more resources to its business operations.

These gripes over listing and reporting costs are not new - many others have voiced similar concerns.

Even before quarterly reporting was implemented in January 2003, Mr S Dhanabalan, the Chairman of Temasek Holdings and a former minister, had expressed his unhappiness with what he felt was a short-sighted measure.

"I am dismayed that we in Singapore have decided to impose this practice on listed companies ... We seem to have tilted in favour of traders in stocks rather than investors in stocks," he was reported as saying.

"I am not in favour of quarterly performing, not because of the cost. Any good company must have at least monthly figures of its performance. But having a system that encourages the market to set quarterly targets and that beats the stock up or down according to penny variations from the target does not seem to me to encourage investment," he said.

With the latest turn of events, perhaps it is time for the Singapore Exchange to review its listing costs and consider relieving the burden of quarterly reporting.

I am vested in this counter at an average cost of $1.45. A couple of days before trading halted, I was trying to add to this counter. Alas, I did not manage to. However, the offer price of $1.80 allows me to exit with a nice bonus. Now it is to sit and wait to see if the acceptances come in at nice rate (refer Wheelock) or the offeror has to revise the offer.

[greengiraffe]

One question that I would like to ask:

Wheelock's 15.87% stake in SC Global (acquired at an average price of $2.35 accordingly to late David Lawrance in an interview with BT in 2009) is not classified as a free float owned by public in SC Global's annual report.

However in the voluntary offer circular, Wheelock is not considered as a concerted party to Simon Cheong.

So would SC global be delisted if the public float be less than 10% (assuming Wheelock's stake is excluded from the calculation of free float held by public).

Thanks in advance.

GG

[specuvestor]

^^ I didn't realise this but I've been thinking Voluntary 75% delisting is the immediate goal and angle here for Simon Cheong