Memstar Technology

[CityFarmer]

I have closed my position with the company, before the approval of the EGM today, with selling prices above $0.12 per share.

It has been a good ride on the special situation investment. I am yet to derive the XIRR result, but it should be above 50%, with my average cost around $0.08 per share. The investment period is about 2 month from the last accumulation date.

Time to redeploy the capital for the next one...

(not vested)

[CityFarmer]

The deal was approved by both UEL and the company's EGMs yesterday. The company shareholders opted for the capital reduction over liquidation, which is logical. The formal will allow a potential upside of RTO.

The company shareholder will eventually get at least $24.37 in cash, and 75 UEL shares for every 1000 shares. The total value is $117 for every 1000 shares (@ UEL share price of 1.235 per share), plus an extra upside of RTO with unknown value.

(not vested)

http://infopub.sgx.com/FileOpen/UE.Resul...eID=274284

http://infopub.sgx.com/FileOpen/EGMResul...eID=274354

[suntzu]

Hi Cityfarmer,

Thank you for your incisive analysis of this situation. Brilliant work and congrats on spotting this opportunity.

Please enlighten me though. From what I read, I thought every 10 Memstar shares can be converted into 1 Utd Environment share plus some cash. You pointed out that every 10 Memstar shares only gets 0.75 Utd shares plus cash.

Am I correct in assuming that? Appreciate your thoughts on this.

The deal was approved by both UEL and the company's EGMs yesterday. The company shareholders opted for the capital reduction over liquidation, which is logical. The formal will allow a potential upside of RTO.

The company shareholder will eventually get at least $24.37 in cash, and 75 UEL shares for every 1000 shares. The total value is $117 for every 1000 shares (@ UEL share price of 1.235 per share), plus an extra upside of RTO with unknown value.

(not vested)

http://infopub.sgx.com/FileOpen/UE.Resul...eID=274284

http://infopub.sgx.com/FileOpen/EGMResul...eID=274354

[CityFarmer]

Hi Cityfarmer,

Thank you for your incisive analysis of this situation. Brilliant work and congrats on spotting this opportunity.

Please enlighten me though. From what I read, I thought every 10 Memstar shares can be converted into 1 Utd Environment share plus some cash. You pointed out that every 10 Memstar shares only gets 0.75 Utd shares plus cash.

Am I correct in assuming that? Appreciate your thoughts on this.

Please refer to EGM circular on the disposal and distribution of UEL deal. You can download from SGX website, if needed.

Please refer to page 15 of the circular. It has given the detail on the distribution. It is the reference of my previous post.

In short, there is 10-to-1, in share and cash (as stated in the circular). There is residue value, either as remaining cash reserve in the company, and potential value extracted from a RTO.

Hope it helps

[safetyfirst]

hi Cityfarmer,

i got this from the sgx webpage

Company Name Type Ex-Date Record Date Particulars
MEMSTAR TECHNOLOGY LTD. ENTITL. 28 Mar 2014 01 Apr 2014 CAPRED 75/1000S

Is the "CAPRED 75/1000S" referring to 75 UEL shares for every 1000 shares?
does it also include the cash distribution of $24.37 for every 1000 shares?

thanks

[yawnyawn]

Is Memstar now a shell company? Quite curious to see it trading at a market cap of 60m, current px 0.024.

Shell company worth that much or did I miss something out?

[oys-ter]

hi Cityfarmer,

i got this from the sgx webpage

Company Name Type Ex-Date Record Date Particulars
MEMSTAR TECHNOLOGY LTD. ENTITL. 28 Mar 2014 01 Apr 2014 CAPRED 75/1000S

Is the "CAPRED 75/1000S" referring to 75 UEL shares for every 1000 shares?
does it also include the cash distribution of $24.37 for every 1000 shares?

thanks

The cash distribution of $24.37 per 1000 share is included as the remark on the stock is XA = X-all instead of XE = X- entitlement which mean 1000 memstart will get 75 UEL shares and $24.37.

[CityFarmer]

hi Cityfarmer,

i got this from the sgx webpage

Company Name Type Ex-Date Record Date Particulars
MEMSTAR TECHNOLOGY LTD. ENTITL. 28 Mar 2014 01 Apr 2014 CAPRED 75/1000S

Is the "CAPRED 75/1000S" referring to 75 UEL shares for every 1000 shares?
does it also include the cash distribution of $24.37 for every 1000 shares?

thanks

The 75 UEL share and the cash distribution was approved together. So both should share the same record date.

[CityFarmer]

Is Memstar now a shell company? Quite curious to see it trading at a market cap of 60m, current px 0.024.

Shell company worth that much or did I miss something out?

Yes, once the XA status, the company is a shell, with cash approx 1-2 mil. It will become the cash company soon

The premium of a shell varies, but with a norm of 10-20 mil, IIRC. A 50 mil premium is not unthinkable, IMO

Having said so, betting on the RTO is too far a shot, with no visibility at the moment, esp to buy it @ 2.4 cents (or 60 mil)

(not vested)

[safetyfirst]

oys-ter and cityfarmer, thanks for the reply