TPA Strategic Holdings Ltd has agreed to dispose the following subsidiaries and associated company of TPA Pte Ltd:
· 29.5% shareholding interest in Telair International Services Pte Ltd;
· 70% shareholding interest in TPA Air Tech Korea Co Ltd, to be acquired by TPA Pte Ltd prior to completion (“Completion”) of the Share Purchase Agreement; and
· 75% shareholding interest in TPA Middle East FZCO, to be acquired by TPA Pte Ltd prior to Completion.
Via the following:
· payment of S$39,750,000 by cash, to be paid upon Completion; and
· payment of S$13,250,000 by the issue by the Purchaser, upon Completion, of shares of Satair A/S,
After the disposal, NTA of TPA will increase from 15.96cts to 36.71cts. This will comprise of approximately $0.20 in cash. The board has intention of distributing part of the cash to shareholders while preserving the rest for new business acquisition and repaying bank loans.
On 19th April, TPA has increased its investment in Starmo from 40% to 90%. However, I do not forsee that acquisition will stop here. The board will not be satisfied with a $1 to $3million profit annually from Starmo.
I estimated that a possible $17.6 million cash will be distributed as dividend to the shareholders. This represent about $0.10 cash, or 38% returns of cash with TPA trading at 26cts at the moment.
I will call for a trading buy with a target of 36cts, or a value equivalent to its NTA. Any further catalyst will depend on the management’s ability to invest in new business. Meanwhile, I would expect the price to reach at least 36cts.
· 29.5% shareholding interest in Telair International Services Pte Ltd;
· 70% shareholding interest in TPA Air Tech Korea Co Ltd, to be acquired by TPA Pte Ltd prior to completion (“Completion”) of the Share Purchase Agreement; and
· 75% shareholding interest in TPA Middle East FZCO, to be acquired by TPA Pte Ltd prior to Completion.
Via the following:
· payment of S$39,750,000 by cash, to be paid upon Completion; and
· payment of S$13,250,000 by the issue by the Purchaser, upon Completion, of shares of Satair A/S,
After the disposal, NTA of TPA will increase from 15.96cts to 36.71cts. This will comprise of approximately $0.20 in cash. The board has intention of distributing part of the cash to shareholders while preserving the rest for new business acquisition and repaying bank loans.
On 19th April, TPA has increased its investment in Starmo from 40% to 90%. However, I do not forsee that acquisition will stop here. The board will not be satisfied with a $1 to $3million profit annually from Starmo.
I estimated that a possible $17.6 million cash will be distributed as dividend to the shareholders. This represent about $0.10 cash, or 38% returns of cash with TPA trading at 26cts at the moment.
I will call for a trading buy with a target of 36cts, or a value equivalent to its NTA. Any further catalyst will depend on the management’s ability to invest in new business. Meanwhile, I would expect the price to reach at least 36cts.
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