Hai Leck

[Musicwhiz]

Check MTQ's history (previous AR), and you will know.

[ngcheeki]

Hai Leck announced an acquisition today of United Holding Pte Ltd for $2.75 million. The target company has a clean Balance Sheet and is profitable (net margin slightly below 5%).

See announcement:-

http://info.sgx.com/webcoranncatth.nsf/V...800258AB9/$file/HLH-Acquisition_of_Shares.pdf?openelement

(Not Vested in Hai Leck, but vested in MTQ which owns some Hai Leck shares)

hi musicwhiz,

how do you know MTQ owns shares in Hai Leck?

You may like to refer to the annual report 2011 page 85, 86 of Hai Leck

"4. VIOLETBLOOM INVESTMENT PTE. LTD. 16,746,000 5.16"

4. MTQ Corporation Limited is deemed to be interested in the 16,746,000 shares held by Violetbloom Investment Pte Ltd by virtue of
Section 7 of the Companies Act, Cap. 50.

http://info.sgx.com/listprosp.nsf/07aed3...20029e018/$FILE/Hai%20Leck%20-%20AR%20(SAR1107006).pdf

[dydx]

Indeed Executive Chairman Cheng Buck Poh today (26Sep12) has finally bought over Non-Executive Director Lee See Kee's (previously the Deputy Executive Chairman) entire 11.1% interest (36.0m shares) at a very good price of $0.205 (vs. latest 30Jun12 NAV/share at $0.268).....
http://info.sgx.com/webcorannc.nsf/Annou...endocument
http://info.sgx.com/webcorannc.nsf/Annou...endocument

This has raised Cheng's total interest (including the 124,800,000 shares held by Cheng Capital Holdings P/L) to 78.9%.

[Stocker]

Confirm the Chengs bought the shares from Mtq.

http://info.sgx.com/webcoranncatth.nsf/V...B004352F2/$file/HLH_Form_1_Mr_Cheng_Buck_Poh.pdf?openelement

[Stocker]

Now the Chengs own about 85% of HL's share and HL is relatively a small company, is it worth for the Chengs to maintain the listing status of HL ?
To maintain a listing company , it needs to spend on listing fees , Independent director fees, regulatory compliance with MAS ans SGX etc etc. This cost million P.A..
So believe it is just a matter of time for the Chengs to take HL private and delist it.

[portuser]

The rights issue of warrants by Hai Leck has the in-principle approval by SGX. Abandoning the exercise may be a sign that privatisation is being seriously pursued. On the other hand, no conclusion can be drawn if the rights issue proceeds, as the controlling shareholder may convert all his warrants subsequently to increase his stake in Hai Leck, making privatisation a less costly affair.

[Stocker]

From the ipo prospectus, the Chengs did not sell their holding in ipo. HL issued 85 millions new shares to new shareholders thru ipo. Aftet the ipo the chengs bought back shares from various parties, including 16 millions from Rotary on 23 july 2009 @ 27c.

http://info.sgx.com/webcorannc.nsf/Annou...endocument

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The rights issue of warrants by Hai Leck has the in-principle approval by SGX. Abandoning the exercise may be a sign that privatisation is being seriously pursued. On the other hand, no conclusion can be drawn if the rights issue proceeds, as the controlling shareholder may convert all his warrants subsequently to increase his stake in Hai Leck, making privatisation a less costly affair.

You are right on this :
'Abandoning the exercise may be a sign that privatisation is being seriously pursued. '

But if the rights issue proceed accordingly, and all minorities take up the rights ( Unless they sell in the open market and the chengs are the net buyer ), otherwise the chengs still have to buy from the minorities from open market to cross 90%.

Chances of privatisation seems high for HL.

[portuser]

A warrant is issued at 5c for every four shares held, shareholders may rather sell their rights to recover some money than put more money in a company that pays no dividend.
If the Cheng Family has planned to privatise Hai Leck all this while, why was the rights issue initiated as recently as 21 Sep 2012? The rights issue is superfluous if privatisation has been the intention.

[Stocker]

Last FY, despite profitable and positive cash reserve of S$48.7m, management refused to declare any dividend . This could be one of the telltale sign.
HL has almost zero borrowing.

[portuser]

Yes, not paying a dividend is one sure way of wearing out and frustrating shareholders.
The AGM was held at the new site which was acquired for the PEC project, and the chairman was keen to inform shareholders that Hai Leck is moving up the value chain. He seemed to be encouraging shareholders to hang on.