Sino Grandness

[crubs]

Specuvestor

Then there's a lot of "first time" for you . Rating agencies sends out credit watch or downgrades even before the due date. There are companies that simply say they won't pay or cant' pay ahead of maturity. That doesn't mean they have not defaulted when the date comes just because they declare they can't pay / or they are restructuring? Did Argentina default even when they had cash to pay? You can read about the interesting saga of Shanshui Cement (where it defaults primarily due to takeover battle) or Kaisa (where local and overseas debtor are treated differently though legally they are not) where there's ample literature. 

SFGI announced it is "restructuring"... that's already material. Why would I need to elaborate since it is clear to you that default doesn't happen until it is announced.

ARGENTINA
"ARGENTINA'S new Peronist president announced the largest debt default in history yesterday ..... The "temporary" default was announced"
http://www.telegraph.co.uk/finance/econo...debts.html

KAISA
"resignation of Mr. Kwok Ying Shing as the chairman of the board of directors of the Company"
"Resignation has triggered the mandatory prepayment provision under the HSBC Facility Agreement and the Company shall immediately repay all the loans together with the accrued interest thereon under the HSBC Facility Agreement (the “Outstanding HSBC Facility”) on 31 December 2014, being the effective date of the Resignation. As at the date of this announcement, the Company has failed to repay the Outstanding HSBC Facility to HSBC. "
"The Company is currently assessing the impact of the above default on other loan facilities of and debt and equity securities issued by the Group which may trigger cross-default under such loan facilities and/or debt and/or equity securities, "
http://www.hkexnews.hk/listedco/listcone...101023.PDF

SHANSHUI CEMENT
"Having explored all options reasonably available to the Group, the Board has concluded that the Group will be unable to obtain sufficient financing on or before 12 November 2015 to repay the Onshore Debt and it is therefore certain that the Group will default on the Onshore Debt on 12 November 2015."
http://www.hkexnews.hk/listedco/listcone...111045.pdf


Kaisa defaulted because the Chairman left and it was a breach of covenant.

You said "There are companies that simply say they won't pay or cant' pay ahead of maturity."
Shanshui Chement defaulted before the due date because they announced default.

Argentina announced default after it stopped paying interest payments.

Fact of the matter is, all 3 examples announced used the term "default"
Shanshui Cement defaulted before the due date because they announced it. The word they used was "default" not "restructuring"
In every scenario which you mentioned, it is clear that "default" and "restructuring" are two separate matters and "restructuring" does not imply default. 


I asked you "If Sino Grandness "defaulted" why didn't SGX require them to make an announcement given that it is material information ? "
You said "It was announced."

Sino Grandness announced "restructuring" and did not announce "default". Even if Sino Grandness "restructuring" had amounted to a  "defaulted", it would be announced in a clear and explicit manner without any room for assumptions and implied meaning.

[specuvestor]

The Argentina link you posted was way back 2001. We are referring to the recent restructuring. We actually have a thread on it since 2013

http://www.valuebuddies.com/thread-3085.html
https://en.wikipedia.org/wiki/Argentine_...tructuring

So Shanshui cement will be second time you heard of announcing default before it actually defaulted

Kaisa just missed bond payments without announcing: http://www.ibtimes.com/kaisa-group-appea...an-1778434

We took months to follow these twist and turn events and you took an hour. You definitely know more than me. Based on your conclusion bonds issued by unlisted entity will not default cause they will not be making announcements.

[weijian]

hi specuvestor/portuser/crubs,
Thanks for the discussion on the issue of default/restructure and how it is been perceived. I think the facts are for all to see, and there is NO NEED to continue the debate if it is on this specific topic anymore. In behavioural terms, this thing is called the "backfire effect".

I guess it can be concluded as such:
"In theory, there is a difference between default and restructure. If practice, there isn't"

hi specuvestor,
I noted that some of the phrases in your replies to crubs (especially) for the last few posts, are not exactly necessary as part of the reply. I think we can all do better.

[specuvestor]

Specuvestor wrote in #1719:
"The next catalyst is the 31 May straight bond payments for more clarity on their cashflow".

The payment of RMB 108m by 31 May 2016 to bondholders is a foregone conclusion. 

If not, it will be very remiss of the Directors of Sino Grandness not to find a way, by now, to rescind the decision to pay dividends to shareholders on 6 June 2016. 

Dividends cannot be paid when debts to bondholders, who are Sino Grandness' creditors, are not honored.

^^ That's true in principle but the dividend is coming from the listco where the TTA loan is going. So I'm pretty sure the dividends will be paid. The dividends were supposed to be paid upstream from Grandness but in the 1Q16 balance sheet you can see there is no cash but only A/R increase in the listco.

The straight bond SB1 payment is however coming from Garden Fresh HK. Garden Fresh HK cannot pay dividend upstream until their EB is settled. There is a good chance the EB creditors will see part of their money back on 31 May.

That's how it works and how I see the cashflow.

Just back from long holiday and think I should update my thoughts before their next results:

1) Dividends has been paid from the listco and IMHO funded by TTA CL placement hence cash left is US$20m minus US$2m dividend is US$18m. As per my previous post: "We know they raised about US$25m from TTA about 18 months back and now looking for another US$20m from TTA in form of convertible loan instead of placement like last time. Why? Prima facie we can guess the cash burn rate is roughly US$18m a year." Hence I would think they have roughly a one year window if IPO doesn't happen which is also incidentally close to the SB2 payment date.
http://www.valuebuddies.com/thread-3371-...#pid128649

2) Now that dividend is paid and cannot be rescinded, I will take my time to formulate my queries and will update accordingly if I wish to.

3) As per I posted, I'm guessing that the 2Q listco balance sheet will show $20m increase in "investment into subsidiary" and $20m decrease in "loan to subsidiary". Little to no cash movement. Let's see.

4) SB1 has been paid as expected which is close to the cash amount end 2015 balance sheet. The question is of course why they need to have SB1 and SB2 payment dates rather than just one SB date since GF cashflow can afford it. There are those in other forums asking why they so geh-kiang put in an expected IPO date. I think it is actually related to why the creditors allow SB1 & SB2 dates. In any case if PHIP not out this week, the date will be missed, which is not unusual that SFGI misses deadlines for creditors. 

The above points are in relation to why I think the dividend and SB1 repayment events would actually clarify their cash positions. From that day on, any additional verifiable cash outlay can be credited to real operational cash flow. We can count the beans from here.

5) Without any significant adjustment in CB optionality and interest expense 2Q results will be weaker QoQ with lower margins and higher A&P. If PHIP delays further they will likely need to incorporate 1H results into prospectus.

These are specific projection points I am highlighting, with historical figures as a mean rather than an end.

[cyclone]

As requested by IR Department of Sino Grandness, your Admin had deleted a post by specuvestor.

Also as requested by IR Department of Sino Grandness, your Admin to post something like this:
“the previous post made by member “specuvestor” in the forum which may be deemed to be inappropriate has been removed.”

[cyclone]

Hi specuvestor, I'm sorry to delete your post.

In the mean, the thread will be closed until Moderators deem it appropriate to open again.

Forumers who wish to post or share about Sino Grandness would be better to contribute at other forums.

Once again, sorry.

[cyclone]

The thread is closed.

[brattzz]

yikes! kanna lawyer letter again? :O :O :O

[crubs]

I thought the thread was closed ?

Cyclone, which post was the IR referring to that made you apologise to specuvestor for deleting it ?

[cyclone]

Hmm, it seems there are technical issues. The thread was closed, but forumers are still able to post.
Try once again.