Update on Sun Business FY05
The 15mth FY ended on 30th March has a revenue of $14.06 million , which is a slight drop of 4.4% compared to 12mth FY last FY. However from other revenue, Sun Business continue to experience gain on disposal of its assets. With a $46 million on others revenue, this brings total profit after tax to be $31.5 million.
What’s is install in Sun Business?
Management continued to streamline and recognise its business operation to shed off non-core / non profitable business in which Sun Business has no long term interest in.
entered into an Equity of Credit Agreement with US-based Cornell Capital Partners Offshore, LP for $10 million;
disposed off the entire stake in Auston International Group Limited (“Auston”), held by its subsidiary, Auston Technology Group;
entered into a sale and purchase agreement with Sun New Media Inc (“SNM”), a NASDAQ listed OTCBB company to divest the following:
- 2 properties in Beijing in exchange for 399,160 shares of SNM common stock;
- 53,000,000 shares in Asia Premium Television Inc in exchange for 757,143 shares of SNM common stock; and
- a licence for the digital publishing of certain magazine titles in exchange for 13,900,000 shares of SNM common stock, of which 50% were satisfied at completion date and the remaining 50% when the digital publishing business meets the profit guarantee of US$2.415 million for the financial year to December 31, 2006.
The Group had on 1 March 2006 announced that its 20.5% owned Asia Network Technologies Limited (“ANT”), through ANT’s subsidiary, BVI-listed Guide TV Ltd (now known as Sun TV Shop Limited, “STVS”), had entered into a non-binding Heads of Agreement with Global Voice plc (“GV plc”), an Irish based shell company unrelated to SGXlisted Global Voice Network. Under the Heads of Agreement, ANT will sell the rights of use of the fibre optic network in perpetuity to GV plc for £60 million, to be satisfied by the issue of 300 million new GV plc shares. The deal is conditional upon the GV plc’s admission to AIM (Alternative Investment Market), in London.
The Group has an investment cost in ANT amounting to $89.8 million. At the date of this announcement, Sun Business have decided not to revalue their investment in ANT as the admission price of the shares has yet to be determined. And, as such they were unable to ascertain the ‘fair market value’ of our stake in ANT. However, as stated in their earlier announcement, the share price upon admission to the AIM is expected to be no less than 20 pence Sterling. The proposed transaction with GV plc, and subsequent admission to the AIM is expected to be completed prior to the release of the Company’s Annual Report for the 15-month period in July. The Group will at that time revalue their investment in ANT, and reflects its value accordingly in the Annual Report.
What Can Shareholder Expects???
Possible disposal of shares in SNM:
Sun Business is cash tight at the moment, and has been working with Cornell for the issue of equities for exchange of cash. With the swap of assets for SNM shares, Sun Business is now rich is assets and might dispose some holdings for exchange of cash.
Possible Unlock of shareholder Value via Cash Distribution or Share distribution
As of 30th March, Sun Business has $78 million of holding in SNM and $89 million of investment in ANT. As such , Sun Business as of 30th March holds abt 8 million shares of SNM and 300 million shares of GV plc. Management might consider a distribution to reward shareholders.
Continual Disposal of non-core business
As Sun Business has investment of S$89 million in ANT, it might consider paring down the stake for other acquisition or use this asset for other acquisition via asset swap.
Valuation
Shareholders are expecting management to provide some form of rewards given the huge amount of assets held in hand. As of 30th March, NTA stand at 19cts. The current share price of 6.5cts represent a 66% discount of its NTA. With more SNM shares to come into account this December IF SNM fulfils the profit guarantee if US$2.415 million, there will be an increase in NTA following this.
As such, excluding growth or premium upon disposal of assets, I will expect Sun Business to be trading close to its NTA value of 19cts.
The 15mth FY ended on 30th March has a revenue of $14.06 million , which is a slight drop of 4.4% compared to 12mth FY last FY. However from other revenue, Sun Business continue to experience gain on disposal of its assets. With a $46 million on others revenue, this brings total profit after tax to be $31.5 million.
What’s is install in Sun Business?
Management continued to streamline and recognise its business operation to shed off non-core / non profitable business in which Sun Business has no long term interest in.
entered into an Equity of Credit Agreement with US-based Cornell Capital Partners Offshore, LP for $10 million;
disposed off the entire stake in Auston International Group Limited (“Auston”), held by its subsidiary, Auston Technology Group;
entered into a sale and purchase agreement with Sun New Media Inc (“SNM”), a NASDAQ listed OTCBB company to divest the following:
- 2 properties in Beijing in exchange for 399,160 shares of SNM common stock;
- 53,000,000 shares in Asia Premium Television Inc in exchange for 757,143 shares of SNM common stock; and
- a licence for the digital publishing of certain magazine titles in exchange for 13,900,000 shares of SNM common stock, of which 50% were satisfied at completion date and the remaining 50% when the digital publishing business meets the profit guarantee of US$2.415 million for the financial year to December 31, 2006.
The Group had on 1 March 2006 announced that its 20.5% owned Asia Network Technologies Limited (“ANT”), through ANT’s subsidiary, BVI-listed Guide TV Ltd (now known as Sun TV Shop Limited, “STVS”), had entered into a non-binding Heads of Agreement with Global Voice plc (“GV plc”), an Irish based shell company unrelated to SGXlisted Global Voice Network. Under the Heads of Agreement, ANT will sell the rights of use of the fibre optic network in perpetuity to GV plc for £60 million, to be satisfied by the issue of 300 million new GV plc shares. The deal is conditional upon the GV plc’s admission to AIM (Alternative Investment Market), in London.
The Group has an investment cost in ANT amounting to $89.8 million. At the date of this announcement, Sun Business have decided not to revalue their investment in ANT as the admission price of the shares has yet to be determined. And, as such they were unable to ascertain the ‘fair market value’ of our stake in ANT. However, as stated in their earlier announcement, the share price upon admission to the AIM is expected to be no less than 20 pence Sterling. The proposed transaction with GV plc, and subsequent admission to the AIM is expected to be completed prior to the release of the Company’s Annual Report for the 15-month period in July. The Group will at that time revalue their investment in ANT, and reflects its value accordingly in the Annual Report.
What Can Shareholder Expects???
Possible disposal of shares in SNM:
Sun Business is cash tight at the moment, and has been working with Cornell for the issue of equities for exchange of cash. With the swap of assets for SNM shares, Sun Business is now rich is assets and might dispose some holdings for exchange of cash.
Possible Unlock of shareholder Value via Cash Distribution or Share distribution
As of 30th March, Sun Business has $78 million of holding in SNM and $89 million of investment in ANT. As such , Sun Business as of 30th March holds abt 8 million shares of SNM and 300 million shares of GV plc. Management might consider a distribution to reward shareholders.
Continual Disposal of non-core business
As Sun Business has investment of S$89 million in ANT, it might consider paring down the stake for other acquisition or use this asset for other acquisition via asset swap.
Valuation
Shareholders are expecting management to provide some form of rewards given the huge amount of assets held in hand. As of 30th March, NTA stand at 19cts. The current share price of 6.5cts represent a 66% discount of its NTA. With more SNM shares to come into account this December IF SNM fulfils the profit guarantee if US$2.415 million, there will be an increase in NTA following this.
As such, excluding growth or premium upon disposal of assets, I will expect Sun Business to be trading close to its NTA value of 19cts.
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