Asian Pay Television Trust (APTT)

[madagnet]

My two cents - this business should be analysed in the context of the Taiwanese consumers. A product that appears to be a luxury good in the Singapore market may be see in the form of a "quasi-utility" product in Taiwan.

TBC may be third in the overall Taiwanese market but it is the market leader by a long stretch in the areas of its operations i.e. Tai Chung.

The key questions here would be whether the economic moat (and margins) is sustainable in the long run and whether it is fairly priced.

[Drizzt]

The business has been restructured and you should look at the pro forma financial statement to see the profit. The previous capital structure looks too scary with gearing of 3x though that included some loan from miif

Going through the prospectus, I am highlighted to the fact that it is an extremely regulated industry and hence an understanding of the relationship between cable operator, the regulator and the public will be crucial.

For e.g, NCC has just submitted a proposal to amend the current CRTA.
1) reduce the minimum network coverage requirement for a new entrant to obtain a license from 30.0% to 15.0%;
2) reduce the minimum network coverage requirement for a new entrant in a franchise area for a period of three years following the launch of commercial services from 100.0% to 50.0%; and
3) remove system operators’ right to broadcast local advertising.

Current legislation will be like forbidding anyone from owning more than 1/3 of the national subscriver.

Following rezoning of franchise area, there are also other operators who are applying for license to cover TBC Group’s franchise areas, including Taichung City.

In addition, there's even a cap rate on the fees that operator can charge. The NCC impose a cap rate of NT$600 for the whole nation and the local government is allowed to impose a cap rate that is lower than the NCC's cap rate. In 2011 and 2013, 4 of TBC's franchise suffered a cut of NT$10 and NT$15. Currently, all TBC's franchise charged at the maximum cap rate.

There's also the covenant term in the prospectus where they seemed to get stricter after a certain number of years.
"Gross debt/EBITDA ratio not exceeding 5.75 times for the initial four quarters, gradually stepping down to 3.0 times after the sixth year;"

With an EBITDA of $200 million, it seemed like TBC might have to do a right issue near the sixth year. There's also the interest coverage ratio and debt service coverage ratio which I did not calculate.

Lastly, the base fee seemed interestingly structured at a fixed fee of $7 million and will increase each year according to the percentage increase in Singapore's CPI.

Shanrui, you really did a comprehensive work. If i recall the fee is structured that its tied to DPU increase.

But that will not matter if the larger percentage is in the base fee. If they are not doing much management to the subsidiary then i am not sure what we need to pay them so much for.

Do you see them being able to build up cash or paying down the debt?

[MINX]

Price: $1.00
Expected Yield: 7.29% (FY13) 8.25% (FY14)
Date and time Event
16 May 2013 : Price Determination Date (subject to change).
17 May 2013, 9 a.m. : Opening date and time for the Public Offer.
27 May 2013, 12 noon : Closing date and time for the Public Offer.
29 May 2013, 2.00 p.m. : Commence trading on a “ready” basis.


Overview

Asian Pay Television is a newly constituted Registered Business Trust formed to acquire its initial
asset, the TBC Group. The TBC Group is Taiwan’s third-largest cable TV operator, with more than
751,000 Basic Cable TV RGUs as at 31 December 2012. The TBC Group is a leading, integrated
cable operator in Taiwan that generates stable cash flows and has an attractive growth profile. The
TBC Group operates exclusively in Taiwan, where it offers Basic Cable TV, Premium Digital Cable
TV and Broadband services to households and businesses in five closely clustered and heavily
populated franchise areas in northern and central Taiwan.

My View:

The fundamentals are no good as the business has been making losses over the last 3 years due to the high cost of debt.

Pay TV is a dying business as consumers are getting smarter by watching whatever videos they want from online directly. Even my mom who is 63 this year knows how to watch free streaming of her favorite Hong Kong dramas online.

Croesus Retail Trust seems like a much better deal with its 8% yield. I mentioned it a few days ago at
http://stockbrokerplayspoker.blogspot.sg...trust.html

I do no see much upside on the 1st trading day. To make this really attractive, investors would really like to be paid 8% to 10% yield.

Are we really that hungry for yield?

Well I think so

Best regards,
Felix Leong
aka pipi486

Hi, I like your analysis of Asia Pay TV. Please share with me why you are so opitmistic about Croesus retail trust IPO? i can't access your post.

[greengiraffe]

When you can't get full value for an asset that you needed to sell to realise full value in a wind up process - who you gonna call? Soros and whoever... Frankly, if Soros is really interested, he can easily buyout MIIF and need not show face via a small unknown stake via IPO.

Sounds like ghostbusters ... avoid


UPDATE 1-Taiwan cable firm leans on Soros, Och-Ziff in $1.1 bln Singapore IPO

Thu May 2, 2013 6:34am EDT
* Trust set to debut in Singapore on May 29
* Soros, Och-Ziff among cornerstone investors in $1.1 bln IPO
SINGAPORE May 2 (Reuters) - Asian Pay Television Trust (APTT), backed by funds linked to Australia's Macquarie Group Ltd, plans to raise up to $1.1 billion in a Singapore IPO, betting on investor demand for high-yield securities to financethe purchase of Taiwan's third largest cable TV operator.
The deal comes ahead of a slew of listings from business trusts and real estate investment trusts (REITs) expected in coming weeks in the Asia Pacific region.

The trust is offering 942.63 million units at a maximum price of S$1.00 unit, while cornerstone investors such as Eastspring Investments, Och-Ziff Capital Management Group LLC , Neuberger Berman and George Soros' Quantum Partners have agreed to buy 451.07 million units, according to a preliminary prospectus filed on Thursday.
APTT is looking to raise S$1.38 billion ($1.12 billion), forecasting a yield of up to 7.3 percent for the year ending December 2013 and 8.25 percent for 2014, the prospectus said.
About 80 percent of the IPO funds will be used to buy the stakes held in TBC Group, which offers cable television and broadband Internet in Taiwan, from the Macquarie International Infrastructure Fund Limited and MKOF Media Investment Limited, another Macquarie fund.
The remainder of proceeds will be used to pay down debt, the listing expenses and for cash awards to TBC Group's senior management. The trust is slated to debut on May 29.
Companies and trusts have lined up to raise $10 billion from IPOs alone in coming months in the region, not counting billions more expected from follow-on deals, which would make 2013 a banner year for the sector.
JPMorgan and Macquarie are the joint issue managers for the offer. They stand to earn $31 million in commissions from underwriting the IPO, the prospectus said.

[felixleong]

In the end the winner is the underwriter, 3% commission seems juicy hehe

[propertyinvestor]

When you can't get full value for an asset that you needed to sell to realise full value in a wind up process - who you gonna call? Soros and whoever... Frankly, if Soros is really interested, he can easily buyout MIIF and need not show face via a small unknown stake via IPO.

Sounds like ghostbusters ... avoid


UPDATE 1-Taiwan cable firm leans on Soros, Och-Ziff in $1.1 bln Singapore IPO

Thu May 2, 2013 6:34am EDT
* Trust set to debut in Singapore on May 29
* Soros, Och-Ziff among cornerstone investors in $1.1 bln IPO
SINGAPORE May 2 (Reuters) - Asian Pay Television Trust (APTT), backed by funds linked to Australia's Macquarie Group Ltd, plans to raise up to $1.1 billion in a Singapore IPO, betting on investor demand for high-yield securities to financethe purchase of Taiwan's third largest cable TV operator.
The deal comes ahead of a slew of listings from business trusts and real estate investment trusts (REITs) expected in coming weeks in the Asia Pacific region.

The trust is offering 942.63 million units at a maximum price of S$1.00 unit, while cornerstone investors such as Eastspring Investments, Och-Ziff Capital Management Group LLC , Neuberger Berman and George Soros' Quantum Partners have agreed to buy 451.07 million units, according to a preliminary prospectus filed on Thursday.
APTT is looking to raise S$1.38 billion ($1.12 billion), forecasting a yield of up to 7.3 percent for the year ending December 2013 and 8.25 percent for 2014, the prospectus said.
About 80 percent of the IPO funds will be used to buy the stakes held in TBC Group, which offers cable television and broadband Internet in Taiwan, from the Macquarie International Infrastructure Fund Limited and MKOF Media Investment Limited, another Macquarie fund.
The remainder of proceeds will be used to pay down debt, the listing expenses and for cash awards to TBC Group's senior management. The trust is slated to debut on May 29.
Companies and trusts have lined up to raise $10 billion from IPOs alone in coming months in the region, not counting billions more expected from follow-on deals, which would make 2013 a banner year for the sector.
JPMorgan and Macquarie are the joint issue managers for the offer. They stand to earn $31 million in commissions from underwriting the IPO, the prospectus said.

Why would Soros want to buy MIIF? Why would SOros want to buy a lousy Toll Highway?

[greengiraffe]

When you can't get full value for an asset that you needed to sell to realise full value in a wind up process - who you gonna call? Soros and whoever... Frankly, if Soros is really interested, he can easily buyout MIIF and need not show face via a small unknown stake via IPO.

Sounds like ghostbusters ... avoid


UPDATE 1-Taiwan cable firm leans on Soros, Och-Ziff in $1.1 bln Singapore IPO

Thu May 2, 2013 6:34am EDT
* Trust set to debut in Singapore on May 29
* Soros, Och-Ziff among cornerstone investors in $1.1 bln IPO
SINGAPORE May 2 (Reuters) - Asian Pay Television Trust (APTT), backed by funds linked to Australia's Macquarie Group Ltd, plans to raise up to $1.1 billion in a Singapore IPO, betting on investor demand for high-yield securities to financethe purchase of Taiwan's third largest cable TV operator.
The deal comes ahead of a slew of listings from business trusts and real estate investment trusts (REITs) expected in coming weeks in the Asia Pacific region.

The trust is offering 942.63 million units at a maximum price of S$1.00 unit, while cornerstone investors such as Eastspring Investments, Och-Ziff Capital Management Group LLC , Neuberger Berman and George Soros' Quantum Partners have agreed to buy 451.07 million units, according to a preliminary prospectus filed on Thursday.
APTT is looking to raise S$1.38 billion ($1.12 billion), forecasting a yield of up to 7.3 percent for the year ending December 2013 and 8.25 percent for 2014, the prospectus said.
About 80 percent of the IPO funds will be used to buy the stakes held in TBC Group, which offers cable television and broadband Internet in Taiwan, from the Macquarie International Infrastructure Fund Limited and MKOF Media Investment Limited, another Macquarie fund.
The remainder of proceeds will be used to pay down debt, the listing expenses and for cash awards to TBC Group's senior management. The trust is slated to debut on May 29.
Companies and trusts have lined up to raise $10 billion from IPOs alone in coming months in the region, not counting billions more expected from follow-on deals, which would make 2013 a banner year for the sector.
JPMorgan and Macquarie are the joint issue managers for the offer. They stand to earn $31 million in commissions from underwriting the IPO, the prospectus said.

Why would Soros want to buy MIIF? Why would SOros want to buy a lousy Toll Highway?

Sorry, I meant to say Soros buying APTT is he so wished to since MIIF is actively looking for buyers

[MINX]

Sorry, let me hesistate a guess here, Soro is also desperately seeking yields for his funds?

When you can't get full value for an asset that you needed to sell to realise full value in a wind up process - who you gonna call? Soros and whoever... Frankly, if Soros is really interested, he can easily buyout MIIF and need not show face via a small unknown stake via IPO.

Sounds like ghostbusters ... avoid


UPDATE 1-Taiwan cable firm leans on Soros, Och-Ziff in $1.1 bln Singapore IPO

Thu May 2, 2013 6:34am EDT
* Trust set to debut in Singapore on May 29
* Soros, Och-Ziff among cornerstone investors in $1.1 bln IPO
SINGAPORE May 2 (Reuters) - Asian Pay Television Trust (APTT), backed by funds linked to Australia's Macquarie Group Ltd, plans to raise up to $1.1 billion in a Singapore IPO, betting on investor demand for high-yield securities to financethe purchase of Taiwan's third largest cable TV operator.
The deal comes ahead of a slew of listings from business trusts and real estate investment trusts (REITs) expected in coming weeks in the Asia Pacific region.

The trust is offering 942.63 million units at a maximum price of S$1.00 unit, while cornerstone investors such as Eastspring Investments, Och-Ziff Capital Management Group LLC , Neuberger Berman and George Soros' Quantum Partners have agreed to buy 451.07 million units, according to a preliminary prospectus filed on Thursday.
APTT is looking to raise S$1.38 billion ($1.12 billion), forecasting a yield of up to 7.3 percent for the year ending December 2013 and 8.25 percent for 2014, the prospectus said.
About 80 percent of the IPO funds will be used to buy the stakes held in TBC Group, which offers cable television and broadband Internet in Taiwan, from the Macquarie International Infrastructure Fund Limited and MKOF Media Investment Limited, another Macquarie fund.
The remainder of proceeds will be used to pay down debt, the listing expenses and for cash awards to TBC Group's senior management. The trust is slated to debut on May 29.
Companies and trusts have lined up to raise $10 billion from IPOs alone in coming months in the region, not counting billions more expected from follow-on deals, which would make 2013 a banner year for the sector.
JPMorgan and Macquarie are the joint issue managers for the offer. They stand to earn $31 million in commissions from underwriting the IPO, the prospectus said.

Why would Soros want to buy MIIF? Why would SOros want to buy a lousy Toll Highway?

[Nick]

DJ Asian Pay Television Trust Prices IPO at S$0.97/Unit; To Raise S$1.4B -Sources (2013/05/16 09:08AM)

SINGAPORE--Asian Pay Television Trust, owned by Taiwan's biggest pay-TV operator, Thursday priced its initial public offering in Singapore above the mid point of an indicative price range that will see it raise S$1.4 billion (US$1.1 billion), people with knowledge of the deal said.

The IPO, Singapore's second biggest so far this year, has been priced at S$0.97 a unit, the people said. The indicative price range was S$0.92-S$1.00 per unit.

Asian Pay Television Trust is an investment vehicle of Taiwan Broadband Communications, which is owned by two funds managed by Australia's Macquarie Group Ltd. -- the Macquarie International Infrastructure Fund (M41.SG), or MIIF, and Macquarie Korea Opportunities Fund. Both funds plan to sell their stakes to Asian Pay Television Trust.

A Macquarie spokeswoman declined to comment.

Asian Pay Television had started taking orders from institutional investors earlier this month and the IPO was nearly three times oversubscribed, one of the people said.

Asian Pay Television's IPO comes at a time when Southeast Asian markets and deal activity have taken off this year: The stock market in the Philippines is up 27% while Indonesia and Thailand both have gained 17%. Singapore is up 8.7% so far this year.

According to data provider Dealogic, Singapore is ranked number one in Southeast Asia so far in terms of equity capital market deals worth S$4.48 billion. That includes a US$1.3 billion IPO by Mapletree Investments Pte. Ltd., a unit of state-investment firm Temasek Holdings Pte., that did an IPO of a China-focused real-estate investment trust in March.

https://groups.google.com/forum/?fromgro...AJqeVHtm94 [Source]

[felixleong]

priced at upper range and demands looks decent at 3 times
think retail investors will be punting hard again for yield, lol