IPC Corporation

[cyclone]

At current price, SGD 2.02, IPC is still grossly undervalued if the capital reduction goes through.
Btw, any capital reduction which was proposed but cancelled ?

NTA after proposed capital reduction : SGD 1.21
Current price : SGD 2.02
Cost after proposed capital reduction : 2.02 - 1.6 = 0.42 SGD
P/B after proposed capital reduction : 0.42/1.21 = 0.34x

<vested, position exceeds single counter limit liao>

[SLC81]

Merry Early Xmas to all who have invested in IPC Corp.
The payout  ($ 1.6) is more than what i expected at ($1.5). Post-payout NAV is still at  $1.21 (with very low gearing)  and i believe at any price  below $2.3 is still a good deal.
Looking forward for IPC to sell off their China Asset and pay out another $1.6 :-)

[Boon]

“Accordingly, after taking into account the above factors, we are of the opinion as of the date hereof that the financial terms of the Offer, on balance, are not fair and not reasonable and accordingly, advise the Independent Directors to recommend Shareholders to REJECT the Offer.” – from IFA
http://www.ipc.com.sg/pdf/IPC_OffereeCir300415.pdf
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The above was the Offeree Circular prepared by an IFA in response to the GO made by OHL back in April.
 
The list of the Group’s property development projects and property investments and their classifications in the Group’s financial statements was set out on page 32 of the document (Apendix 1):
 
Interestingly, Xu Ri Wan Huan Yuan (club house) was classified under PPE, whereas, Xu Ri Wan Huan Yuan hotel (The Grand Nest hotel)  was classified under Properties developed for sale.
 
Strangely, two property development projects in PRC (including Aenon International Plaza) were classified under Financial assets available for sale.
 
Appendix 5 contains some valuation reports as well.
 
I think there was lack of clarity on the asset classification in the Annual Reports, without which it would be hard to figure out the likely RNAV of the remaining assets, post capital reduction. I initially thought the Zhuhai hotel was classified under PPE - but the BV looks too low to be true - ha!-ha!. 
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[Boon]

On closer scrutiny, it is fair to classify the 8.6 million of Unquoted Securities under Financial assets available for sale. However, these unquoted securities had inconsistently being reported as Debt in AR2014 and as Equity in the IFA report.
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Financial assets, available-for-sale (From page 33 of the IFA report)

The financial assets available-for-sale, comprised mainly quoted securities of S$13.5 million (representing 4.02% of the Group’s total assets) and unquoted securities (of less than 20% equity interest) by the Group in two property development companies in PRC of S$8.6 million (representing 2.55% of the Group’s total assets) as at 31 December 2014.

In respect of quoted securities, the Company confirmed that there is no material change to the investment portfolio between 31 December 2014 and the Latest Practicable Date. Based on the last traded prices of these securities as at the Latest Practicable Date, the market value of these securities amounted to approximately S$14.2 million, representing a surplus of S$0.7 million to fair value as at 31 December 2014.

In respect of the Group’s investment in unquoted securities of the two property development companies in PRC, the Company had, for purposes of its FY2014 audit, commissioned valuations of the development projects undertaken by the property development companies. Based on the valuations, no impairment was made to the Group’s investment in these two property development companies which were recorded at cost as at 31 December 2014. The Company confirmed that the projects are still in progress and there were no return of capital or distribution of profits from the two property development companies between 1 January 2015 and the Latest Practicable Date. Accordingly, no valuation of the two development projects was obtained in connection with the Offer. 

Financial assets, available-for-sale (From page 51 of AR2014):
Unlisted securities
- debt investments - Asia Pacific  = SGD 8.558 million

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[cyclone]

EGM for the proposed capital reduction of S$1.6 per share
Date : Thursday, 18 February 2016
Time : 2.30 PM
Venue : 23 Tai Seng Drive, #06-00, Deutsche Telekom Centre, Singapore 535224

[cyclone]

Expected last date and time of "cum" trading of the Shares on the SGX-ST: On or about 23 February 2016 at 5.00 p.m.
Expected commencement of "ex" trading of the Shares on the SGX-ST: On or about 24 February 2016 at 9.00 a.m.
Expected Books Closure Date for the Proposed Capital Reduction: On or about 26 February 2016 at 5.00 p.m.
Expected effective date of the Proposed Capital Reduction: On or about 31 March 2016
Expected payment date for the Cash Distribution pursuant to the Proposed Capital Reduction: On or about 5 April 2016

[Boon]

OHL holds 31.56% of the shares - what is the likelihood of him voting against the resolution?
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2.6.1 General
The Proposed Capital Reduction will be effected under Section 78C of the Companies Act
and is subject to, inter alia, the following:-

1. (i)  all the Directors making a solvency statement in relation to the Proposed Capital Reduction and compliance with other relevant solvency requirements as prescribed by the Companies Act;
   
2. (ii)  the approval of the special resolution in relation to the Proposed Capital Reduction (the “Capital Reduction Resolution”) by a majority of not less than three-fourths of the Shareholders present and voting at the EGM, of which not less than 21 days’ notice of the EGM shall have been given; 
   
3. .......................................................................................
   

http://www.ipc.com.sg/pdf/IPC_PR_26Jan16_2.pdf
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[cyclone]

Hi Boon,

Does it refer to the number of shareholders present and voting OR number of shares ?

[MOV]

In my opinion, very unlikely. Buddies be sure to turn up and vote to collect your big 'ang pao'.  

[Boon]

Hi Boon,

Does it refer to the number of shareholders present and voting OR number of shares ?

Hi cyclone,

According to the following link - it is 75% majority of the votes cast at a meeting (my interpretation is number of shares)

http://singaporelegaladvice.com/law-arti...solutions/

Special resolutions
A special resolution is a formal decision passed by at least 75% majority of the votes cast at a meeting. Generally for public companies, 21 days’ written notice must be given for the meeting. For private companies, 14 days’ written notice must be given. However, the meeting can be held at shorter notice if members who hold at least 95% of the voting rights agree. In addition, the company must lodge a copy of all special resolutions at ACRA.
Typically, special resolutions are needed when the decision to be made is especially important. Examples of decisions where the company must pass a special shareholder resolution, in accordance with the Companies Act:

• to change any provision in its memorandum and articles of association
  
  
• to change its name
  
  
• to reduce its share capital
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The following voting result (datepulse) shows number of shares as well. 

http://infopub.sgx.com/FileOpen/Resoluti...leID=49525
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