junior's toks

Complicated Life

Yesterday, Habib announced a plan to buy the core marine assets and business of Singapore Stock Exchange-listed Chuan Hup for RM1.31bil, to be satisfied via a RM1.1bil cash payout and a share issuance.

“Habib will incorporate a new company (newco) in Singapore. The newco will raise RM644mil in non-recourse debt to part finance the acquisition,’’ Scomi senior vice-president Hilmy Zaini Zainal told reporters in Kuala Lumpur yesterday. Besides the RM644mil in non-recourse debt, Habib will sell 174 million shares at RM1.15 per share to Scomi to raise RM200mil; propose a 1-for-1 rights issue at RM1.15 per share to raise RM85mil; undertake a 160 million preference share sale to raise RM160mil; and sell new shares to institutional investors at RM1.25 a share to raise RM120mil

They could not have made it more complicated, can they? Honestly, I think they are very clever in doing this deal (strategically, it is also alright). Scomi wants the marine assets of Chuan Hup, but do not want to hurt its balance sheet by taking more debts. So, they go through this very indirect way - using a JEWERY shop to buy marine assets. We really need a real definition for 'friendly party'. This is not just friendly party, this is 'fuck buddy'.

Clever deal, but too obvious to expose our PM's son's influence.....

I wonder why the MEER's family (who has been building the Habib brand for 50 years) will accept this deal because they do not get cash, they are diluted in Habib from 60%+ to around 10%....Don't tell me he LOVES marine business and see the OPPORTUNITY..

How about Minority Shareholders? Well if you have been one of those who LOVE rumours and bot Habib before its suspension, May your lucky star continue be with you...... the last traded price of Habib is RM 2.60. The issuance price to Scomi is RM 1.15......

Given that the tenat of 'buy on rumours, sell on news' never fails in KLSE, how much do you think Habib will fall?

I would say a lot....

Junior

posted by Junior @ 2:35 PM