Frasers Property (formerly: Frasers Cpt (FCL))

[Aldar]

I think FCL is a bit too "big" now
My feel is that the thais will get rid of some assets first
the recent IPO spin out is one of such moves

The second step could be paying out of the cash to the indebt parents (since they still own over 85% of FCL, FNN also paid a lot of cash to parents)

3rd step, pumping up the free float to say 20-30% via placement or selling of stakes (they need to restore the float because they want to tap the market in the future for $$ to grow the company)

then when the dust is cleared then finally they do the swap for FNN shares (may take 1-2 years?)

above analysis just my own guessing, I may be very wrong ^^

1. By injecting assets into a FCL Hospitality Trust (1st being the InterContinental), TCC could reduce its gearing gradually

2. FNN and FCL still need a certain level of cash to operate and invest for growth. TCC/Thai Bev could not keep milking them through capital reduction.

3. Any reduction of stakes in FCL to harvest cash for TCC would most likely involves the injection of property assets by TCC into FCL and subsequent rights issue;
Not too sure how Thai Bev gonna reduce its stake in FNN...maybe inject some beverage brands into FNN?

4. Any delay in the share swap would only delay the realisation of synergies between TCC and FCL (and FNN & Thai Bev).

Note that TCC is 100% owned by Charoen while Thai Bev is 60+% owned by Charoen. Hence he would have more incentive to do the swap asap.

Also ThaiBev would have to pay for TCC's shares in FNN using a mix of FCL shares and cash - since ThaiBev owns only 28.5% in both FNN and FCL while TCC owns 59.4%.

[valueinvestor]

There is no compulsion he need to do the swap . He may just need to reduce his holdings.

[Aldar]

When will the share swap take place ?
It will not affect the intrinsic value of CPL.
Share price didn't go below 1.40 recently , so this should be a good level to enter , IMO.

No exact timeline...I would guess they have:

- to announce something next wed
- subsequently appoint an IFA to look into the matter
- issue a circular and
- hold an EGM for the minority shareholders to vote on the Share Swop

Made a mistake here...Please note that the above is with reference to Thai Bev.

Hence Thai Bev would have to appoint an IFA to look into the Share Swap with TCC, issue a circular and hold an EGM for minorities to vote on the Share Swap.

[felixleong]

I also think they are more likely to sell a stake to increase the public float instead of placement
for placement, new shares are created and the $$ raised goes to the company, so they have to take an extra step to get the $$ out of FCL into their pockets
for selling of stakes, the no new shares are created and the $$ is passed directly to the thais (so I think this route is more likely to be taken)

The thais are known to be savvy, don't think they will wanna cash out at such low levels. My feel is $1.60-2.00 (but hey dun listen to me, I'm wrong half the time lol ^_^)

[felixleong]

The reason why I think the swap will not take place so soon is because its more of a tidy up process
the main focus now for the Thais is still to get cash and pay down their debt

[valueinvestor]

Placement shares can be from their existing holding, no need to issue new shares.

[felixleong]

Placement shares can be from their existing holding, no need to issue new shares.

ya, so that's the same as the 2nd way(selling of stakes), no new shares created and the $$ goes to the thais

[felixleong]

There is no compulsion he need to do the swap . He may just need to reduce his holdings.

why would he wanna reduce his holdings?
what are the advantages and disadvantages of doing a swap?

please elaborate!

[felixleong]

Tried to find out the Thais' cost of FCL but to no avail. If their cost is lower than 1.42 , it is still possible to place out some shares at a discount.

you don't even know the numbers, yet u still dare to say they might place out shares at this price for a discount?

[valueinvestor]

" If their cost is lower than 1.42 , it is still possible to place out some shares at a discount."

Please read carefully.