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The High Court has released its judgement together with the Grounds of Decision on Sembcorp Marine’s (the “Company”) claims against PPL Holdings Pte Ltd in Suit 351/2010/H. The decision is not favourable to Sembcorp Marine.
The Company is obtaining legal advice with a view of appealing the decision and will make the appropriate announcement in due course.
The above outcome is not expected to have any material impact on the net tangible assets and earnings per share of Sembcorp Marine for the year ending December 31, 2012.
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
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it could be a good punt, especially with its warrants.
the way I see how the company had 2 warrant issuance exercise is that it offers great value for punting.
for the 1st warrant (2009, expiring soon), the punters could have sold during the period of sale of PPL to Yangzijiang. stock price went beyond 50 cents, with its warrant issued at 1 cent, exercise price 32 cents; punting profit should have been around 20 cents.
for the newly issued warrant(2012, expiring 3 years later), basically, it is a cheap bet on the upside of the company. issued price 1 cent, and exercise price 27 cents. If favorable ruling comes from lawsuit with SembCorp marine, there could be good upside for the warrant. How much is the downside? the 1 cent you have paid.
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(31-05-2012, 12:49 PM)freedom Wrote: for the newly issued warrant(2012, expiring 3 years later), basically, it is a cheap bet on the upside of the company. issued price 1 cent, and exercise price 27 cents. If favorable ruling comes from lawsuit with SembCorp marine, there could be good upside for the warrant. How much is the downside? the 1 cent you have paid.
Only if you had bought the mother share to entitle the warrant at 1ct. And judging from the bid/offer now with a favorable news, the warrant may trade much higher (>5ct) when it opens for trade next week. Nevertheless, the upside is still huge if the the mother share can trade above 40ct.
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31-05-2012, 01:45 PM
(This post was last modified: 31-05-2012, 01:47 PM by camelking.)
(31-05-2012, 12:49 PM)freedom Wrote: it could be a good punt, especially with its warrants.
the way I see how the company had 2 warrant issuance exercise is that it offers great value for punting.
for the 1st warrant (2009, expiring soon), the punters could have sold during the period of sale of PPL to Yangzijiang. stock price went beyond 50 cents, with its warrant issued at 1 cent, exercise price 32 cents; punting profit should have been around 20 cents.
for the newly issued warrant(2012, expiring 3 years later), basically, it is a cheap bet on the upside of the company. issued price 1 cent, and exercise price 27 cents. If favorable ruling comes from lawsuit with SembCorp marine, there could be good upside for the warrant. How much is the downside? the 1 cent you have paid.
Already punted 
Hope there will be under-subscription of the warrants
(31-05-2012, 12:41 PM)cif5000 Wrote: (31-05-2012, 12:23 PM)camelking Wrote: (31-05-2012, 12:04 PM)ngcheeki Wrote: (31-05-2012, 11:49 AM)sgpunter Wrote: I was actually eyeing Baker but I realize a large bulk of the cash hoard is from the sale of PPL which is in dispute now. If the judgement is unfavorable towards Baker, the price sure plunge as the sale of PPL will be reversed and Sembcorp can get PPL cheap. Much cheaper.
Not true leh!! if you really look at the balance sheet for Q1 FY2012
Under current liabilities section there is an item called
Deferred gain on disposal of subsidiary (g) 58.237 million
(g) Due to the pending legal suit with Sembcorp Marine Ltd, the Group has deferred the gain on disposal of subsidiary, PPL Holdings Pte Ltd to QD Asia Pacific Ltd, which was completed in October 2010.
This would mean that if judgement is unfavorable the "reserved money" will return otherwise the amount will be realized as gain.
not true also
The deferred gain only refer to the net profit made from the disposal.
The actual cash portion is much more than the deferred gain.
If i remember correctly, around USD100m or so...Lazy to read again...
There's the unaccounted profit (~$50m) for FY10 and FY11 in the 15% stake in PPL.
So, there's a middle ground should the sale becomes null and SCM don't get PPL cheap (for $59.4m).
Thank Cif. You are right!
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Price will probably go up due to the announcement but as Sembcorp Marine is highly likely to appeal the decision, the cloud of uncertainty still remains. Sheesh and we all know how long these legal tussles will take to resolve...
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(31-05-2012, 02:00 PM)sgpunter Wrote: Price will probably go up due to the announcement but as Sembcorp Marine is highly likely to appeal the decision, the cloud of uncertainty still remains. Sheesh and we all know how long these legal tussles will take to resolve...
that's why the warrant is more advantageous. it has 3-year expiry and cheap price. Not that I am encouraging people to buy the warrant from open market. please do your own due diligence.
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(31-05-2012, 02:04 PM)freedom Wrote: (31-05-2012, 02:00 PM)sgpunter Wrote: Price will probably go up due to the announcement but as Sembcorp Marine is highly likely to appeal the decision, the cloud of uncertainty still remains. Sheesh and we all know how long these legal tussles will take to resolve...
that's why the warrant is more advantageous. it has 3-year expiry and cheap price. Not that I am encouraging people to buy the warrant from open market. please do your own due diligence.
Can buy the warrants after and if Sembmarine announced that they are appealing.
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SCM appears to be unwilling to talk more on the suit outcome - "not favorable" is the only words. Baker Tech is taking quite a while to craft the press release. I am hoping to see more details and a total victory. With that and with the mutual-scratching of backs with Keppel Corp, the share price should more or less achieve the valuation of Dyna-Mac.
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This one looks very interesting indeed!
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This BT article contains a useful summary of the background of the legal battle between SCM, and PPLH and Baker.
http://www.timesdirectories.com/maritime...xxx/635253
The business has changed significantly since 2007 and the Controlling Shareholders have also changed - it is now Benety Chang.
I have bought a little to give me the motivation to learn more about Baker Tech's businesses.
Anyone else here vested in this?
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