On 11th April 07, Eng Wah (EW) has sold its investment in Daikin Aircon for S$9.3 million. Below is the link to the announcement.
http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_D3497B442956B2E7482572BC001883A1/$file/AnnouncementSaleDaikin130407.pdf?openelement
On 24th May 07, EW has entered into a share exchange agreement with Transcu, that shares of EW will be exchanged with Transcu. ( 1 share of EW will be exchanged for 1 share of Transcu). On page 3 of the document, the conditions precedent 6(h) is that: EW must have no assets or liabilities except for S$10 million cash. And 6(i) says 75% of the shareholders must vote FOR the deal.
Attached Below is the document.
http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_AA872C8907AC6EEC482572E5000180A2/$file/EngWahRTO24MAY2007.pdf?openelement
Bearing these above conditions are requirements of the Reverse Takeover (RTO) deal, EW in theory ( what we predict ) will sell off all its assets namely its 4 cinemas and its office space at Orchard Towers.
Condominium unit Lot 208, Section 63, Jalan Binjai,Kuala Lumpur, Malaysia1,509sqf *
FreeholdOffi ce units 400 Orchard Road, Singapore 7,330sqf * Freehold
Empress Theatre 321 Clementi Avenue 3, Singapore 16,000sqf # 99 years leasehold commencing July 1978
Jubilee Entertainment Complex 61 Ang Mo Kio Avenue 8, Singapore 18,300sqf # 99 years leasehold commencing July 1979
Mandarin Theatre 535 Kallang Bahru, Singapore 15,000sqf # 99 years leasehold commencing May 1975
Toa Payoh Entertainment Centre 450 Toa Payoh Lorong 6, Singapore 15,000sqf # 99 years leasehold commencing August 1970
The 4 cinemas totalling 64,300 sq feet in land area, together with Orchard Towers 7330 sqfeet only registered S$17.9 million in book value. This is where all our interest come in. It works on to be abt $250 per sq feet, which is very very undervalued as compared to the market rate.
Assuming a $2000 psf for its orchard towers, and $1000 for the 64,300sqf cinemas,
Orchard towers = $2000 x 7330 = S$14.6m
Cinemas = $1000 x 64,300 = S$64.3m
Cash on hand = $11m ( as reported on 31st March) + S$9.3m ( daikin sales ) = S$20.3m
Total Estimated Worth = $99.2 million of cash SHOULD the cinemas can be sold at $1k psf.
Excluding $10m to be kept in account of EW, there is a POTENTIAL S$89.2m to be distributed to shareholders. EW has a 150 million shares float, so 89.2 / 150 = 59.5cts POTENTIALLY could be distributed to shareholders.
Also Transcu will be issuing new shares at 38cts to other investors, so we use a 38cts to add on to the 59.5cts = $0.975....that is what potentially u can get.
Risk Analysis:
1) Deal is likely to go through as EW holds 70%, they only need another 5% to vote FOR the deal.
2) Assumption for orchard tower is $2k psf, and $1k psf for the rest of the cinema. ( this is purely my assumption, maybe Dennis can provide the est psf of heartland prices) .My assumption is based on the fact that they are receiving S$4.8 m from rental income. And usually rental income is abt 6-8% yield of the asset, so assets should worth $60m - $80m.
3) Also we use the price of Tanscu placement price of 38cts to gauge the value of the new company.
4) The deal may or may not go through depending on the preceding conditions.
http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_D3497B442956B2E7482572BC001883A1/$file/AnnouncementSaleDaikin130407.pdf?openelement
On 24th May 07, EW has entered into a share exchange agreement with Transcu, that shares of EW will be exchanged with Transcu. ( 1 share of EW will be exchanged for 1 share of Transcu). On page 3 of the document, the conditions precedent 6(h) is that: EW must have no assets or liabilities except for S$10 million cash. And 6(i) says 75% of the shareholders must vote FOR the deal.
Attached Below is the document.
http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_AA872C8907AC6EEC482572E5000180A2/$file/EngWahRTO24MAY2007.pdf?openelement
Bearing these above conditions are requirements of the Reverse Takeover (RTO) deal, EW in theory ( what we predict ) will sell off all its assets namely its 4 cinemas and its office space at Orchard Towers.
Condominium unit Lot 208, Section 63, Jalan Binjai,Kuala Lumpur, Malaysia1,509sqf *
FreeholdOffi ce units 400 Orchard Road, Singapore 7,330sqf * Freehold
Empress Theatre 321 Clementi Avenue 3, Singapore 16,000sqf # 99 years leasehold commencing July 1978
Jubilee Entertainment Complex 61 Ang Mo Kio Avenue 8, Singapore 18,300sqf # 99 years leasehold commencing July 1979
Mandarin Theatre 535 Kallang Bahru, Singapore 15,000sqf # 99 years leasehold commencing May 1975
Toa Payoh Entertainment Centre 450 Toa Payoh Lorong 6, Singapore 15,000sqf # 99 years leasehold commencing August 1970
The 4 cinemas totalling 64,300 sq feet in land area, together with Orchard Towers 7330 sqfeet only registered S$17.9 million in book value. This is where all our interest come in. It works on to be abt $250 per sq feet, which is very very undervalued as compared to the market rate.
Assuming a $2000 psf for its orchard towers, and $1000 for the 64,300sqf cinemas,
Orchard towers = $2000 x 7330 = S$14.6m
Cinemas = $1000 x 64,300 = S$64.3m
Cash on hand = $11m ( as reported on 31st March) + S$9.3m ( daikin sales ) = S$20.3m
Total Estimated Worth = $99.2 million of cash SHOULD the cinemas can be sold at $1k psf.
Excluding $10m to be kept in account of EW, there is a POTENTIAL S$89.2m to be distributed to shareholders. EW has a 150 million shares float, so 89.2 / 150 = 59.5cts POTENTIALLY could be distributed to shareholders.
Also Transcu will be issuing new shares at 38cts to other investors, so we use a 38cts to add on to the 59.5cts = $0.975....that is what potentially u can get.
Risk Analysis:
1) Deal is likely to go through as EW holds 70%, they only need another 5% to vote FOR the deal.
2) Assumption for orchard tower is $2k psf, and $1k psf for the rest of the cinema. ( this is purely my assumption, maybe Dennis can provide the est psf of heartland prices) .My assumption is based on the fact that they are receiving S$4.8 m from rental income. And usually rental income is abt 6-8% yield of the asset, so assets should worth $60m - $80m.
3) Also we use the price of Tanscu placement price of 38cts to gauge the value of the new company.
4) The deal may or may not go through depending on the preceding conditions.
Comments