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The million dollar question is: why Sinwa wants to do that knowing that they will be left with a loss making entities? I am sure Mike Sim has his reason for doing so. Based on Sinwa previous track record, it is likely they will distribute part of the proceed back to SH. But the interesting thing is of course, what's next? Is it possible that Mike might want to take the shell company private?
I am holding on to my shares and see how it develops from here.
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Can any knowledgeable postingfreak share the essentials of the deal?
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15-11-2018, 11:59 AM
(This post was last modified: 15-11-2018, 12:03 PM by ghchua.)
(14-11-2018, 03:51 PM)Ben Wrote: The million dollar question is: why Sinwa wants to do that knowing that they will be left with a loss making entities? I am sure Mike Sim has his reason for doing so. Based on Sinwa previous track record, it is likely they will distribute part of the proceed back to SH. But the interesting thing is of course, what's next? Is it possible that Mike might want to take the shell company private?
I am holding on to my shares and see how it develops from here.
There is no reason to believe that Mike Sim wants to take the company private by selling most of the profitable parts of Sinwa to the buyer. The more possible reason is that he is looking to exit the company. The reason why they are left with loss making entitles might be the buyer do not want those entities and therefore, they could not be sold. Also, you cannot sell everything as you run the risk of being classified as a "cash company" by SGX, giving you lesser flexibility and attractiveness is marketing the shell company to potential buyer since you will have a deadline to deal with.
The end game I can see in Sinwa is similar to the Chew's Group case that I have discussed extensively here in that topic. That is, Mike Sim will be looking to sell the shell company eventually.
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(15-11-2018, 11:59 AM)ghchua Wrote: There is no reason to believe that Mike Sim wants to take the company private by selling most of the profitable parts of Sinwa to the buyer. The more possible reason is that he is looking to exit the company. The reason why they are left with loss making entitles might be the buyer do not want those entities and therefore, they could not be sold. Also, you cannot sell everything as you run the risk of being classified as a "cash company" by SGX, giving you lesser flexibility and attractiveness is marketing the shell company to potential buyer since you will have a deadline to deal with.
The end game I can see in Sinwa is similar to the Chew's Group case that I have discussed extensively here in that topic. That is, Mike Sim will be looking to sell the shell company eventually.
This is definitely one of the few possibilities. But if Mike Sim intention is to eventually sell everything, he could have structure the deal to include the loss making entities and accept a lower price. It will be more difficult for him to sell the loss making entities alone later. I still think he has some thing on his mind, than to just simply exit and be done with.
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Hi Ben,
As I have mentioned above, if you sell everything (including the loss making entities), you run the risk of being deemed as a cash company by SGX.
Those loss making entitles could still be sold later or packaged with some cash left in the company to sell it together as a listed shell.
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(15-11-2018, 11:59 AM)ghchua Wrote: (14-11-2018, 03:51 PM)Ben Wrote: The million dollar question is: why Sinwa wants to do that knowing that they will be left with a loss making entities? I am sure Mike Sim has his reason for doing so. Based on Sinwa previous track record, it is likely they will distribute part of the proceed back to SH. But the interesting thing is of course, what's next? Is it possible that Mike might want to take the shell company private?
I am holding on to my shares and see how it develops from here.
There is no reason to believe that Mike Sim wants to take the company private by selling most of the profitable parts of Sinwa to the buyer. The more possible reason is that he is looking to exit the company. The reason why they are left with loss making entitles might be the buyer do not want those entities and therefore, they could not be sold. Also, you cannot sell everything as you run the risk of being classified as a "cash company" by SGX, giving you lesser flexibility and attractiveness is marketing the shell company to potential buyer since you will have a deadline to deal with.
The end game I can see in Sinwa is similar to the Chew's Group case that I have discussed extensively here in that topic. That is, Mike Sim will be looking to sell the shell company eventually.
The announcement already states that upon disposal the listco will become a cash company.
Quote:1.4 Rule 1018 of the Listing Manual
Upon successful completion of the Disposal, the Company will cease to have any operating subsidiaries or businesses and will become a cash company as defined under Rule 1018 of the Listing Manual. Accordingly, the Company will have to comply with the requirements pursuant to Rule 1018 of the Listing Manual.
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How much cash will Sinwa (at company level) end up with? What is the cash per share?
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(15-11-2018, 01:42 PM)ghchua Wrote: Hi Ben,
As I have mentioned above, if you sell everything (including the loss making entities), you run the risk of being deemed as a cash company by SGX.
That's right! And Boss Mike knows that too, so why is he doing it this way? Obviously, there is more to come.
(15-11-2018, 01:42 PM)ghchua Wrote: Those loss making entitles could still be sold later or packaged with some cash left in the company to sell it together as a listed shell.
Why not do it now together with the other entities and saved the effort later? And if say he has the intention to do some re engineering of the shell company before selling it at a later date, presumably for a higher price, then is it not better to hold on to the shares now and see what is his game plan?
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I have some technical questions on the disposal announcement and appreciate any reply:
4.2.5 - it meant purchase consideration would remain the same rite, regardless of any possible future dividends declared and to be paid to existing shareholders?
4.2.7 seems to give some special protection to ceo tan lay ling, why is that?
4.4 seems to say irrevocable vote for already stands at 56%, then what would be the deciding voting threshold for the EGM? is it 90%
5 rationale by the directors taking into account the business prospects - is it really that bad for sinwa business prospects to settle for just a mere 10-20% more on top of its present nav/nta?
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16-11-2018, 12:53 PM
(This post was last modified: 16-11-2018, 12:54 PM by ghchua.)
Hi pianist,
Can't answer all your questions, but I can answer on the voting threshold. It is 50% as it will be tabled as an ordinary resolution at an EGM. So, with the irrevocable undertakings, you can say it is a done deal.
Which is why the buyer might not want to go through this via other structures like general offer, delisting resolution etc, where there is a risk of non-acceptance from minority shareholders, thereby having to live with them.
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