Healthway Medical Corporation

[Tiggerbee]

HMC investors might be better off selling the shares should the share price gap up on Mon. It's an all share offer with no cash offered.

[lanina1]

If u look at IHC's volume chart, it was very unnaturally consistent, and there was a volume spike every other 5 days. I guess everyone knows wat does that mean... I will take Tiggerbee's advice if I have invested in Healthway med.

[happyharvest]

If u look at IHC's volume chart, it was very unnaturally consistent, and there was a volume spike every other 5 days. I guess everyone knows wat does that mean... I will take Tiggerbee's advice if I have invested in Healthway med.

What does that mean? distribution?

[cyclone]

Voluntary Conditional Cash Offer

S$0.042 in cash per share.

The Offeror is a wholly-owned subsidiary of Valiant Leader Limited, and an indirect subsidiary of each of Tamsett Holdings Limited, Rickon Holdings Limited, Lippo China Resources Limited, Skyscraper Realty Limited, First Tower Corporation, Lippo Limited and Lippo Capital Limited.

The offer price represents a premium of approximately 13.82%, 19.66%, 19.32% and 22.09% over the volume weighted average price per Share for the one (1)-month, three (3)-month, six (6)-month and twelve (12) month periods up to and including 6 February 2017, being the last full Market Day immediately prior to the Offer Announcement Date. 

More details in http://infopub.sgx.com/FileOpen/VGO%20fo...eID=438196

[specuvestor]

interesting... wonder how this is linked with IHC... which was spin off by HMC in June 2013 in the first place... before trying to take over the parent in 2015-16. Lippo holds 12.54% of IHC

[CY09]

http://www.straitstimes.com/business/hea...-firm-sick

An interesting piece on healthway. Despite the takeover attempts, Healthway itself is struggling to even pay its own employees.

[d.o.g.]

This saga is an example of massive corporate governance failure. But minority shareholders who stuck with it also bear some of the blame.

Loan to Party B

In the 2014 annual report, Note 12 states that party B was not a related party. If, at that time, the only director of party B was Fan Kow Hin's daughter, then the accounts were false, in which case the directors would be responsible for publishing false accounts and should be held accountable. Certainly Fan Kow Hin must have known about what was going on.

In the 2015 annual report, Note 12 to the accounts no longer describes party B as non-related. So either Fan Kow Hin's daughter was not previously the only director, but became the only director in 2015, necessitating the change in language, or Note 12 in the 2014 accounts was not correct, and it was corrected in the 2015 accounts.

Could minority shareholders have done anything?

Yes, of course.

First, every year the company had to seek approval for related party transactions. These were approved by minority shareholders. If the transactions were not approved, the company would have to unwind the deals, which could have saved it from future losses. If the company persisted with the deals, then apart from a breach of the Listing Rules, the directors would be liable to lawsuits for defying the shareholders' will.

Second, at every AGM the minority shareholders were entitled to seek clarification about the loans to party A and party B. These loans eventually made up 40% of the company's equity. Clearly the company would suffer serious damage if the loans went sour, as they eventually did.

Form over substance

As a matter of fact, if the loans were the major source of funding for party A and party B, then HMC actually controlled them, which means they should have been consolidated into the accounts, regardless of what the legal ownership structure was. "Control without consolidation" is unfortunately a common way to hide liabilities and investors must be vigilant.

===

Side note: I stayed away when I saw that the key founder was a corporate executive and not a doctor. IMHO when a founder does not have direct hands-on experience with the product or service delivered by his company, the long-term odds are not good because the founder cannot "get his hands dirty" to understand the situation on the ground. Instead, he has to manage by the numbers, or rely on key employees who may have agendas of their own.

As usual, YMMV.

[Big Toe]

Quote by d.o.g "IMHO when a founder does not have direct hands-on experience with the product or service delivered by his company, the long-term odds are not good because the founder cannot "get his hands dirty" to understand the situation on the ground."

I could not agree more. There are many examples of how some of the best managed companies are by the founder/CEO who have knowledge of all aspects of the business in great detail. They also have a sound strategy and is financially prudent. Wong Ngit Liong(Venture), Lim Hock Chee(Sheng Shiong) to name just 2. (Investors who had done very well for themselves probably also know some of the investments they have made in the industry/company inside out.)

The only time where well managed companies fail is when the industry they are in is no longer viable and is sinking at a very rapid pace with little/no chance of recovery.

[YMPL]

What will the choice of the shareholders, Lippo or Gateway? Both are sold on cheap anyway. The Lippo offer seems a better price, IMHO.

Healthway Medical receives initial net proceeds of $10 mil from Gateway
SINGAPORE (March 27): Heathway Medical Corporation (HMC) last Friday received the initial net proceeds from the first tranche (T1 CN B) of its convertible notes issuance to Gateway Partners, the private equity firm.

This comprises a principal amount of $10 million raised from the Convertible Notes “B” issued by Healthway to Gateway, enabling the latter to fulfil its immediate liquidity needs.

In a Monday announcement, HMC says the T1 CN B conversion shares will be issued at a conversion price of 3.384 cents each.
http://www.theedgemarkets.com.sg/article...il-gateway

[YMPL]

@Moderator

I noticed there are two threads on the company. One is this thread, and one older thread below. I suggest to merge them.

https://www.valuebuddies.com/thread-1109-page-2.html