Frasers Property (formerly: Frasers Cpt (FCL))

[greengiraffe]

Thanks for your lengthy analysis.

I have blind faith in someone with 88% stake in a company. When he can't get off a supposedly run away train, he will have to navigate the train eventually to the destination.

I m happy to risk my money with someone that owns the company substantially.

To each his own, I take calculated risks hopefully with the right driver at least better some folks that blindly steering into a "disaster" zone.

Vested
GG

Give me one reason that TCC has to pay back his credit card. I don't see bankers are chasing TCC for debt repayment. Now is not a distress moment. If I am his banker, I will not ask for the money back as he is good for the credit and I get paid from the fee and the bank enjoin interest income from the loan.

No business owner just buy a business to sell it in pieces. That's what speculators or private equity does.

I don't know the bankers nor the covenant of this bridging loan. Never had I said it is a distressed situation. FNN was not distressed. The catalyst for the whole drama was when OCBC sold their stake to TCC. Bottomline is whether u believe it is LBO based on the anecdotal evidence.

My point is that it is most likely an LBO which I had explained. It is not that difficult to piece the puzzle together with so much activity, whereas thoughts we can only guess. (There is no lack of threads where people are guessing what the towkays are thinking)

For sure the towkay is a business owner but I think he is also 1) Opportunist 2) Empire builder. He struck deal and turn around sold APB remember? He effectively vetoed the FNN capital reduction for his own personal agenda. He "restructured" FNN soon after in breakneck speed, which I have commented in other threads that the only other player comparable was OUE. You are not new to the market, how many times have you seen towkays so willingly to share the spoils so quickly? Not sure how you define "selling off in pieces" but control is definitely important for him due to 2)

You have been watching ThaiBev closely and you would know how levered it was to go through the FNN deal. I wouldn't be surprised that TCC has similar capital structure as ThaiBev back then. Most of the time, if there is alternatives, a listed entity is used for M&A because of using their shares as currency. IIRC ThaiBev didn't issue shares for the FNN deal. Why would TCC need ThaiBev to lever up to do the deal with them? OTOH do u see "bankers chasing ThaiBev to return loans?" I think it is obvious that it is also in ThaiBev's interest to delever.

In the same vein why didn't TCC with Aussie interest, not do the ALZ deal directly if it is cash rich? We have thus yet to see how FCL is going to use its "currency"

Thereafter the FNN deal , we see rapidly fire of corp actions of 2 capital returns and 1 spin-off within the space of 8 months, which also directly reduced ThaiBev gearing. We have discussed that in the FNN thread. FNN is also no longer net cash. And if Towkay has so big plans for FCL, why bother to do the capital reduction in the 1st place?

Follow the cash flow and the gravy and you can see how the towkay is repositioning. That's why I think FNN and ThaiBev will continue to pay the bills of acquisition. And as of now I don't see the final act of FNN and FCL share swap unfeasible. In fact if FCL did do a cash call, my guess is the swap will happen soon AFTER the call is done. But that's probably too simplistic and I suspect the towkay might have more imagination to juggle the cash around.

If GG wants to dance with the empire-builder he needs to know what is the towkay's motivation. Most of the time their motivation is not enhancing shareholders' value. In the past 2 years it has only been so because we were anticipating how his actions will benefit OPMI. That's why I am waiting for the final act, just as discussed 1.5 years ago.

[freedom]

Debt repayment schedule depends on the willingness of the borrower and the eagerness of the banks. Let's say it is LBO. Sure, the banks will be eager to get their money back for the bridge loans provided. However, it is highly likely that the bridge loans for original buyout have been converted into long term loan. The same has already happened to Thai Beverage. I don't doubt that TCC has done similar.

Since the initial payout from FNN about a year ago, how much money has TCC extracted from FNN or FCL besides regular dividend? Very little. For both FNN and FCL, it has been business per normal. The expectation that TCC would extract more from FNN and FCL has been disappointed.

I did not say that FCL will not sell some pieces of AustraLand to someone. Actually, I suspect that it has to do something. FCL does not have the financial muscle to acquire AustraLand without huge damage to its own credit profile. But that's not the target. Just like for FNN or FCL, the target is not to liquidate them, but to run them as a normal business.

As I have indicated before, Thai Beverage and FNN will continue run their business as any business should be run. Any high expectation that any more money than regular dividend from them will likely be duly disappointed. TCC does not need cash urgently, why would it do so? I don't see bankers chasing Thai Beverage for loan, but Thai Beverage as a well run public company should repay its loan. However, that has everything to do with share performance than anything else.

Yes, I have been watching Thai Beverage and Thai Beverage surely did not disappoint me. It has been delevered as expected as any other company would do after an acquisition. As where it stands now, its balance sheet has largely been back to normal now or in the near future.

As I have mentioned earlier, public company is very different from private holding company just as public property holding companies would be very different from normal people taking a mortgage. I, as a consumer can easily finance a property deal by taking up as much debt as 4 times of my downpayment(for first property) and still is considered prime by the bank. But not for a public listed company. Investors would think the company has gone mad to take so much debt. That's the precise the reason why Thai Beverage will voluntarily delever, but for TCC, it is unlikely as TCC just like an individual, but Thai Beverage is a public listed company.

[specuvestor]

^^ Your assertion runs contrary to the market understanding that listed companies have better quality credit profile and clarity for more capacity to borrow, hence the rationale of getting listed for better access to capital. Individuals are borrowing on personal guarantees which is very different from corporates.

I never said about liquidating either. His aim is to control and run the businesses with as little cash from himself as possible. Nonethless looking at the past 2 years we don't have to wait too long to see if the towkay will again reshuffle the cash around and restructure. I'm sure we can revisit this again in very near future.

In fact I think it is a great case study for Buddies to study how a TRUE towkay operates, because his actions are like "fast forward" unlike for example Wee which you need to be pretty old to understand what is he actually doing

Thanks for your lengthy analysis.

I have blind faith in someone with 88% stake in a company. When he can't get off a supposedly run away train, he will have to navigate the train eventually to the destination.

I m happy to risk my money with someone that owns the company substantially.

To each his own, I take calculated risks hopefully with the right driver at least better some folks that blindly steering into a "disaster" zone.

Vested
GG

I think you missed my point My point is that his destination and your destination (as an OPMI I presume) is different. To paraphase the chinese idiom, you can go on an expensive trans-siberian train and be comfortable you will arrive, but makes no difference if where you want to go is Australia

In fact I wont be surprised that in future his stake will be reduced down to 50%, just as in Thai Bev. He just needs to control the entities and recycle his capital elsewhere.

[greengiraffe]

I v simpleton one lah... if he needs to eventually dilute, share price will have to perform in order for anyone to support his plans. How he does it, let him do it since his stake substantially larger than mine.

Whether u syndicate stock or in this case better still, he is building and expanding a business in order to entice new supporters so no worries lah.

He is the ultimate driver, I just enjoy the free ride and get off before he keeps going round and round.

U think why I left F&N alone... so far right pick on FCL relative to F&N.

No Worries Mate
GG

^^ Your assertion runs contrary to the market understanding that listed companies have better quality credit profile and clarity for more capacity to borrow, hence the rationale of getting listed for better access to capital. Individuals are borrowing on personal guarantees which is very different from corporates.

I never said about liquidating either. His aim is to control and run the businesses with as little cash from himself as possible. Nonethless looking at the past 2 years we don't have to wait too long to see if the towkay will again reshuffle the cash around and restructure. I'm sure we can revisit this again in very near future.

In fact I think it is a great case study for Buddies to study how a TRUE towkay operates, because his actions are like "fast forward" unlike for example Wee which you need to be pretty old to understand what is he actually doing

Thanks for your lengthy analysis.

I have blind faith in someone with 88% stake in a company. When he can't get off a supposedly run away train, he will have to navigate the train eventually to the destination.

I m happy to risk my money with someone that owns the company substantially.

To each his own, I take calculated risks hopefully with the right driver at least better some folks that blindly steering into a "disaster" zone.

Vested
GG

I think you missed my point My point is that his destination and your destination (as an OPMI I presume) is different. To paraphase the chinese idiom, you can go on an expensive trans-siberian train and be comfortable you will arrive, but makes no difference if where you want to go is Australia

In fact I wont be surprised that in future his stake will be reduced down to 50%, just as in Thai Bev. He just needs to control the entities and recycle his capital elsewhere.

[greengiraffe]

When even Kwek is feeling the heat on its core Singapore market and actively looking Down Under and Japan to expansion, FCL and Towkay Charoen may afterall be right.

Note that apart from ongoing China Developments, Kwek did not strongly advocate China as a core destination unlike Capland and possibly Temasek with its strong focus on China Banks...

[newyorkcityboy]

Frasers CP is closing in on Australand.
Stockland has just sold its 19.9% stake to Frasers!

[greengiraffe]

Towkay Charoen style - no nonsense - take it or leave it...

Angmo has no money to start off with and they have to be accountable to their own shareholders...

With Kwek confirming that CDL is actively looking down under, basically, Towkay has bought well in advanced for a established platform that has been left behind by Capland.

With Aussie interest rates staying low and overseas investors (big corporations and small individuals) making a beeline down under, Towkay will be proven right over time.

Vested
Fool's Full Faith In Towkay
GG

Frasers CP is closing in on Australand.
Stockland has just sold its 19.9% stake to Frasers!

[toiletsiao]

Frasers Centrepoint Tightens Grip on Australand
Posted on 15 August 2014 12:26 | By Ross Kelly | DOW JONES INSTITUTIONAL NEWS
SYDNEY--Frasers Centrepoint Ltd. (TQ5.SG) tightened its grip on residential developer and office landlord Australand Ltd. (ALZ.AU), after a major shareholder accepted its 2.59 billion Australian dollar (US$2.41 billion) takeover bid.

Australia's Stockland (SGP.AU) said Friday that it had agreed to sell its 19.9% holding in Australand to Frasers, a Singapore-based real-estate firm controlled by Thai billionaire Charoen Sirivadhanabhakdi. Its decision comes after Frasers had already built a 62% holding in Australand, according to previous market filings.

Stockland had acquired the stake earlier in the year before proceeding to make a full cash-and-shares bid for the company that it later sweetened, but which was subsequently trumped by Frasers' all-cash offer of A$4.48 per Australand share.

Stockland paid an average of A$3.78 per share for its stake and said it would book a profit of around A$80 million from the sale.

Write to Ross Kelly at ross.kelly@wsj.com

http://www.asx.com.au/prices/market-news...5ea8f000mn

[Madmoney]

Now that Stockland has decided to walk away with a handsome profit, the spotlight will now fall on how FCL is going to finance this deal. None of the stockbroking houses that have been calling a buy on this stock have given us a clear idea or at least a good guess on how FCL is going to finance this MEGA deal in such a manner that it will not be value destructive.

Correct me if I am wrong.

[greengiraffe]

Patient lah... the man himself is not panicking why are you panicking or are you rejoicing as you have shorted? If the takeover needs to be fully concluded and an comprehensive overview will at least take 3 months. Like I have always been saying stock market makes a mockery of hard work in executing real business. Even before things are settled, knives are already being brandished.

Analysts are desktop guys, they won't know how real businesses are done and they are not allowed to publish conspiracy theories if if they have conviction in them.

There are sufficient threads posted for you to form your own judgement.

Time will tell if a gungho man will be proven right. Noone is giving the man any chance hence when he is proven right with him own $, that is when everyone will look back and said how on earth did I miss it.

Vested
Fool's Full Faith
GG

Now that Stockland has decided to walk away with a handsome profit, the spotlight will now fall on how FCL is going to finance this deal. None of the stockbroking houses that have been calling a buy on this stock have given us a clear idea or at least a good guess on how FCL is going to finance this MEGA deal in such a manner that it will not be value destructive.

Correct me if I am wrong.