Forterra Trust (formerly: Treasury China Trust)

[KopiKat]

The ball is now in Nan Fung's court. Extracts from Nan Fung Group website on their previous PR release dated 30-Jul, on this Forterra stake acquisition,

The Company views its investment in Forterra Trust as an attractive platform to expand its investments into the PRC commercial property market, especially in the first tier cities like Shanghai, where majority of Forterra Trust’s asset is located.

From their website, their projects in Singapore are SportsHub & South Beach (Hotel + Mall + Residential) as part of consortium.

Also, this AM's SGX Annc on the Irish Court judgement which 'Boon' had posted before that.

[opmi]

Yes. Nan Fung took over as partner in CDL South Beach from the Arabs. Got money when others dont. Solid.

Now need to go thru the due diligence process to seal the deal.

I guess nothing wrong with the assets. If not, the 2 Brits wont want to potong jalan into their own pockets. hahaha.

[Boon]

With the approval of the settlement between NAMA and Treasury Holdings now granted by the Irish High Court, the acquisition of the “controlling stake” in Forterra Trust by Nanfung seems likely to be completed as planned.

The share price of Forterra Trust closed at SGD2.22 today.

SIAS Research (New Backer in Sight, dated 24-July-2013) put the intrinsic value at SGD 2.45 per share, and projected the following DPU:

DPU: SGD
FY2013 = 0.0
FY2014 = 6.4 cents (dividend yield = 2.9% , based on share price of SGD 2.22)
FY2015 =11.7 cents (dividend yield = 5.3%, based on share price of SGD 2.22)

http://ir.forterra.com/phoenix.zhtml?c=2...l-analysts

GO or no GO, I guess it all depends on one person - the “new boss”

Here is the link to an “email interview” with the “new boss” of Nanfung back in 2011

http://www.forbes.com/2011/01/05/vivien-...ealth.html

[opmi]

Nan Fung just mean to wait for 6 months after buying share at $2.98. Then can make a technical MANDATORY GO at mkt price by crossing 30%. After 6 mths, $2.98 will not be the reference price for MGO.

I am more interested in the juicy assets NF can inject into Forterra after 6 months. That can only happen after NF cross 30%.

[KopiKat]

I am more interested in the juicy assets NF can inject into Forterra after 6 months. That can only happen after NF cross 30%.

Why do they need to cross 30%?
For REIT, when F&N took control of FCOT, they were holding <30%. Their 'restructuring' of 'injecting' new assets + Rights cum CPPU of course had to go thro' EGM.
Any difference for Forterra, assuming NF were to do something similar if the deal really happen?

---

GO or no GO, I guess it all depends on one person - the “new boss”

Here is the link to an “email interview” with the “new boss” of Nanfung back in 2011

http://www.forbes.com/2011/01/05/vivien-...ealth.html

More news article on Nan Fung Group on SCMP

[opmi]

Cross 30% to trigger MGO. To facilitate future asset injections, which will definitely involve issuance of shares to NF.

Cross 30% WHILE the price is lower than NAV, "Get it done and over with". Can acquire 1% or 2% from open market every 12 months.

After 30%, they can ask for Whitewash Waiver from minorities if the shares issued is a substantial chunk. Of course, they can
also ask for WW with less than 30% too.

As I said, it will be a technical GO. Dont expect a big premium. Why pay a big premium when you can get bigger stake by asset injections.

It is my guess only. From observations of what companies usually do.

[KopiKat]

Thanks, opmi, for sharing your observations.

One step closer, with (a) & (b) in Conditions Precedent to Settlement cleared, in the latest SGX Annc Update.

[GreedandFear]

Regarding Nam Fung using asset injections as a means of diluting minority shareholders, do bear in mind that Pacific Alliance Group owns 16.45%. As Far as I can see, they are a hedge fund / private equity manager. I would be surprised if they will not act to try to protect the upside on their investment either by increasing their stake or by voting with minority shareholders against abnormally large dilutions.

I note that the AGM passed the standard equity raising resolution, allowing the Trust to issue up to 50% new shares but only 20% as a placement (as opposed to a rights issue) so there is a limit on how many shares can be directly placed with NF in exchange for new assets but, of course, they can rights issue us to death should they choose.

Everyone is focusing on NF being a property investor and wanting to have this REIT as a vehicle. However, do bear in mind that they are also a very very large financial investor. Hence, this investment could be part of their real estate long term investment or it could just be a pure financial investment to gain on the NAV discount.

Vested

[freedom]

why not look at it this way?

If it is the assets NF is interested in, why not just buy the assets from Forterra Trust?

I believe that what NF is interested in is the platform.

[opmi]

If they only want the assets, why even buy the Forterra trust manager?

They want an 'ATM machine' to do capital recycling.