Forterra Trust (formerly: Treasury China Trust)

[HitandRun]

I'm wondering about the need for the Put/Call Option of 3.08% which is exercisable only within Jan-14. Is that a "smoke-screen"? Or perhaps Nan Fung wanted John Ronan to continue to stay interested (by being vested) during this transition period? So, if what you expect turns out to be true, Act II will come after that? Unless, it's a smokescreen??

The real show may only be just starting.. but perhaps in slow motion...

KopiKat san

AFAIK, the timing of the 3.08% does not appear to be crucial, as NF have included it in their deemed interest.

I have already bought my tickets, may the show begin!

[Boon]

Forterra has announced the completion of acquisitions by Nanfung - including the completion of assignment of 3,050,000 options to Nanfung.

Under the revised Singapore Code on Takeovers and Mergers (April 2012), for the purpose of determining thresholds in MGO, options are counted as acquired shares

Therefore, total number of shares deemed acquired by Nanfung：

68,268,322 (UPA- existing shares) + 7,815,057 (put/call option – existing shares) + 3,050,000 (UOS – new shares to be issued) = 79,133,379

Enlarged share base = 253,794,717 (existing) + 3,050,000 (new shares to be issued) = 256,844,717

Without enlarged share base: % shares deemed owned by Nanfung = 79,133,379/253,794,717 = 31.18%

With enlarged share base: % shares deemed owned by Nanfung = 79,133,379/256,844,717 = 30.81%

I could be wrong on this - but if my interpretation is correct - Nanfung has crossed the 30% MGO thresholds.

(vested)

[HitandRun]

Boon san

Tell you what. Can we vote you to be a member of the Securities Industry Council (perhaps representing all the retail investors)?

[kbl]

Good afternoon HitandRun san.

Good buy???

<not vested yet>

Boon san

Tell you what. Can we vote you to be a member of the Securities Industry Council (perhaps representing all the retail investors)?

[HitandRun]

Orang Kaya san

Good buy or good bye (to the money), only time will tell.

IMHO, it appears out of character for NF to run a public company. And since they do have loads of experience investing in properties in China already, chances are they just wanted to add these assets to their portfolio.

According to my half-past six, back of the envelope calculation, they will make loads of money if they GO at 2.98. Even if kenna pushed to 4.50, the profits are not too shabby either.

[kbl]

Orang Kaya san

Good buy or good bye (to the money), only time will tell.

IMHO, it appears out of character for NF to run a public company. And since they do have loads of experience investing in properties in China already, chances are they just wanted to add these assets to their portfolio.

According to my half-past six, back of the envelope calculation, they will make loads of money if they GO at 2.98. Even if kenna pushed to 4.50, the profits are not too shabby either.

hello Big Boss HitandRun san

ok..rubber stamp 3lots @2.12 for a *feel*....seller hse 73

<vested>

[KopiKat]

Forterra has announced the completion of acquisitions by Nanfung - including the completion of assignment of 3,050,000 options to Nanfung.

Under the revised Singapore Code on Takeovers and Mergers (April 2012), for the purpose of determining thresholds in MGO, options are counted as acquired shares

Therefore, total number of shares deemed acquired by Nanfung：

68,268,322 (UPA- existing shares) + 7,815,057 (put/call option – existing shares) + 3,050,000 (UOS – new shares to be issued) = 79,133,379

Enlarged share base = 253,794,717 (existing) + 3,050,000 (new shares to be issued) = 256,844,717

Without enlarged share base: % shares deemed owned by Nanfung = 79,133,379/253,794,717 = 31.18%

With enlarged share base: % shares deemed owned by Nanfung = 79,133,379/256,844,717 = 30.81%

I could be wrong on this - but if my interpretation is correct - Nanfung has crossed the 30% MGO thresholds.

(vested)

I was looking thro' AR2012,

Pg44 : There are a total of 7,460,000 Forterra Options outstanding as at 31 December 2012 (175,000 was converted in 2013 fm SGX Annc)
Pg91-92 : Details of the 7 tranches of UOS (Only Tranche ONE is in-the-money and that's likely the one being offered to Nan Fung)
Pg98 : Shows potential impact to NAV if UOS were exercised. Also from Convertible Debts

Some thoughts,
1. Perhaps the options rule refers only to an option to issued shares (Call/Put on existing issued shares) and not to-be-issued ones (eg. UOS)?
2. If I'm wrong in (1), then we'd also need to include in the Base (of total shares) the other UOS that's not offered to Nan Fung?
3. Further to (2), would we also need to increase the Base further by adding the potential units from the Convertible Bonds?

Perhaps you're right but we need to consider (2) & (3), that's why the 30% trigger was not activated? I was looking at their additional stake in Sino Ocean Land Convertible Securities (posted the link in an earlier post) and in HKSE, they do treat that as part of their Total Holdings in Sino Ocean Land.

So, if I'm right, perhaps the 30% trigger will be "unintentionally" triggered when the Convertible Bonds holders decide to redeem, rather than convert (this change of shareholder to Nan Fung being a trigger itself for early redemption) and Nan Fung can likely easily get a waiver if they so intend...

---

Orang Kaya san

Good buy or good bye (to the money), only time will tell.

IMHO, it appears out of character for NF to run a public company. And since they do have loads of experience investing in properties in China already, chances are they just wanted to add these assets to their portfolio.

According to my half-past six, back of the envelope calculation, they will make loads of money if they GO at 2.98. Even if kenna pushed to 4.50, the profits are not too shabby either.

hello Big Boss HitandRun san

ok..rubber stamp 3lots @2.12 for a *feel*....seller hse 73

<vested>

Wah... you put in 60, isit? Now got 57 in Buy Q...
My previous ones also mostly CP '73'.... I wonder which brokerage Pacific Alliance uses...

[quidam]

...
Under the revised Singapore Code on Takeovers and Mergers (April 2012), for the purpose of determining thresholds in MGO, options are counted as acquired shares
...

Ianal, but according to Rule 14 Note 10 (page 87) of the code, I'd interpret it as meaning acquisitions of options are not considered, unless they are exercised immediately.

"In general, the acquisition of instruments convertible into, rights to subscribe
for and options in respect of new shares which carry voting rights
does not give rise to an obligation under this Rule to make an offer. However,
the exercise of any conversion or subscription rights or options will be
considered to be an acquisition of voting rights for the purpose of this Rule. "

Also, the 22nd July announcement of the sale clearly states 29.98%of the units in issue, hence like KopiKat said, I think getting a waiver is likely for unintentional trigger.

[Boon]

Thanks “quidam”

It seems that the rule does not apply to options in respect of new shares – Kopikat was right.

Rule14.1 Note16，page 88 .

Options and derivatives
"For the purposes of Rule 14, a person who has acquired or written any option or derivative which causes him to have a long economic exposure, whether absolute or conditional, to changes in the price of securities will normally be treated as having acquired those securities. Such options and derivatives would exclude instruments convertible into, rights to subscribe for and options in respect of new shares (see Note 10 on Rule 14.1). Any person who would breach the thresholds stipulated in Rule 14.1 as a result of acquiring such options or derivatives, or, acquiring securities underlying options or derivatives when already holding such options or derivatives, must consult the Council beforehand to determine if an offer is required, and, if so, the terms of the offer to be made………………………………………………"

So Nanfung deemed interests remains at 29.98%

___________________________________________________________________________________________________________________________________________

Hi “HitandRun”,

For the post you are suggesting, I think we need someone who are well-versed with the takeover code – which obviously I am not – I got it wrong – ha-ha!

BTW, I do concur with you that Nanfung could still make some good profits if they GO at SGD2.98 - but not at SGD 4.50

That said, there is no certainty that Nanfung will make a GO. Therefore one must be prepared for this eventuality.

NAV = SGD 4.81 per share as at 30-June-2013, share price is still trading at < 50% NAV

With the sale of Central Plaza completed, liquidity had improved a lot, as at 30-June-2013, the Trust had total cash holdings equating to SGD 193.87 million, of which 9.42% was held onshore in China in RMB – the rest was held offshore. IMO, there are in a position to make distribution to unitholders for FY2013 and beyond. DPU of SGD 5 cents equates to SGD 12.7 million. Wondering if new management would do so?

Good cash-flows are expected in 2H2014 and onwards with the completion of the HQ re-development project expected in 1H2014.

If there is no GO, I would be equally happy if the Trust could resume paying some decent dividends - the Trust could afford to do so IMO

(vested)

[KopiKat]

That said, there is no certainty that Nanfung will make a GO. Therefore one must be prepared for this eventuality.

NAV = SGD 4.81 per share as at 30-June-2013, share price is still trading at < 50% NAV

With the sale of Central Plaza completed, liquidity had improved a lot, as at 30-June-2013, the Trust had total cash holdings equating to SGD 193.87 million, of which 9.42% was held onshore in China in RMB – the rest was held offshore. IMO, there are in a position to make distribution to unitholders for FY2013 and beyond. DPU of SGD 5 cents equates to SGD 12.7 million. Wondering if new management would do so?

Good cash-flows are expected in 2H2014 and onwards with the completion of the HQ re-development project expected in 1H2014.

If there is no GO, I would be equally happy if the Trust could resume paying some decent dividends - the Trust could afford to do so IMO

(vested)

From latest Q213 financials, pg29 of 37, under "4(a) Amount Available for Distribution",

Realised gains available for distribution to Unitholders at the beginning of the period = $5,802,000
Add: Gain on sale of subsidiaries = $17,964,000
Add: Realised valuation gain on sale of subsidiaries = $24,349,000
Amount from realised gains available for distribution to Unitholders at the end of the period = $48,115,000

That translates to 19ct / unit. I suppose they can reinstate DPU payout if they so wishes. But, I noticed that for Q213, Finance Cost > NPI, so don't expect the whole 19ct.... maybe 5ct / half, like long time ago?