Mulpha has Rm1b short term borrowing but Rm400m long term loan. Loan restructuring or/ and sales of asset is unavoidable. They have already been selling quoted shares, raising fund via rights issue now. Its share premium is enough for it to make 2 more rounds of rights issue. So, it will not surprise me if they do it again.

Mulpha's another big issue is with loan restructuring of FKP, its 30% associate. The negotiation is still on-going. FKP has lost >85% of its share price in the past 6 months due to that concern on loan restructuring.

The above are 2 major reasons why its share cannot go up till better times recover in the economy. Mulpha's big loss is all due to FKP's impairment loss. Mulpha still makes net profit excluding that but not enough to pay all short-term loan.

The sell down may not happen now as if it does happen, rights issue will be unattractive or even not subscribed if the share price falls to 30sen, making the major shareholders take up all the unsubscribed shares and increasing their shareholding to >60% in the process.

So many outcomes are possible depending on how its major shareholders want to play the game.

So to play mulpha, you must have spare cash to buy rights issue this round and maybe 2 more rounds to come. Patience is important too. Fundamentally, Mulpha has a lot to offer because of its good assets. That is provided nothing too wrong happens to FKP. If you have money and patience, you should buy more whenever it drops, especially in a panic.

On the contrary, NTA has gone up due to 191m in 2 quarters of forex gain on translation of its results in Australia. NTA now is RM1.75. After rights issue, it will be RM1.03 based on Q2 09 financial position.

Mulpha Australia raised borrowing to buy FKP stake. FKP's share has been so battered that if a turnaround takes place, the upside will be interesting. But both FKP and Mulpha Australia need to renew or restructure its short term loan due within 12 months as they clearly are unable to pay even with rights issue proceed.

FKP will annouce results on 27 Aug which will be a bad one of about A$100m impairment loss, based on my inference. Take out the impairment loss, Mulpha registers a Rm15m profit. A good one but not enough to repay short term loan due in June 2010.

So is this a buy call? I wonder how they calculate the right issue of 0.50 since their share price currently also 0.50+-

This post has been edited by mynewuser: Aug 23 2009, 09:44 AM

Hi: Issue of any new shares cannot be lower than a company's par value as it is tantamount to issuance at a discount which is prohibited by Company's Act.

Mulpha's par value per share is RM0.50. Hence the Rm0.50 issue price. They need to cover the difference of RM0.20 between par value and 1st call of Rm0.30 by using share premium account. Hence the need to split it into 2 calls.

Effectively and taking out the legal and accounting jargons, it is a RM0.30 a share rights issue.

But their 2Q report make us panic ... Loss >60mil. Unaudited.

But if i plan now, i would like to go in at 0.45 and wait 18 months. Sounds good ?

CKC : Based on your calculation, will they go bankcrupt ?

Share Price = $0.48, NTA = $1.75
Cash and bank balances = 253 millions
Guarantee cash value per share $0.21
Will gulong tikar very soon?

sometimes see this share also want to vomit. Continue to hold i say. When property market bounces back..you will rip great rewards.

Take your word. Will buy when time come.

NTA is one thing, cash and bank balance is one thing and short term debt or matured debt is another to look at.

If the company is cash rich and don't need to pay for borrowing which is due, then company won't need to issue right issue anymore. (CKC has explained the situation)

A profitable company or high NTA can run into trouble as well if it has no enough cash to pay for its due borrowing. As asset worth is on paper not liquid. Just like you could be millionaire that you owned many many land, houses, but now bank now demand you to pay your due credit bill of 10k next week, but you don't have the cash to pay for it, you still will be blacklisted by the bank.

A company that register loss can survive as long as its cashflow is healthy to sustain the company operation.
A company that register lot of paper profit but with negative cashflow might not able to survive or pay the wages to its workers.

Don't mean Mulpha is bad or good. Just when looking at company issue, lot of factors need to considered, aka need to look at overall picture. As NTA at Rm1.75 doesn't mean share price below Rm1.75 is worth to buy one.

Cheers.

This post has been edited by cherroy: Aug 25 2009, 11:48 PM

Erm..... What is NTA? Paiseh...

FKP's refinancing issue has been solved and no big amount of loan will be due till June 2011 when A$300m plus will become payable. So, are about 20 months to earn enough PAT to pay for this A$300m. Any insufficiency can be made up by selling assets when better times return and assets need not be sold at fire-sale prices. FKP share price has plunged from A$7.55 to A$0.56 today. After 2 rounds of rights issue, NTA of FKP is now A$2.00

But the big problem now is Mulpha Australia which needs to rescehdule its RM1b loan due by June 2010 to long term. The loan basically arose from Mulpha Australia's investment in FKP and 2 rounds of rights issue in quick succession. This RM1b is sth Mulpha is unable to pay on time for sure unless it does fire sale of assets now. So it needs to reschedule it at a higher price which normally will not be agreed by banks unless it is accompanied by another rights issue by MIB(since its share premium is still enough for 1 or 2 more rounds of rights issue) or some sale of assets. If FKP and FKP's share is doing well, MIB may place out a part of its share in FKP to another strategic investor or to stockland at a better price than what the current market may fetch.

If rescheduling is successfully done without selling the cash cow or good assets of Mulpha at cheap price, and the economic recovery takes hold, Mulpha will turn around. MIB's long term loan is low at RM390m only.

So, you need cash and patience to play mulpha whose underlying main biz is still profit-making but unable to meet all payemtns to bank due to crisis and lack of prudence in arranging financing previously.

i also have some fkp shares....that one also vomit blood...hahaha

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Added on August 26, 2009, 10:32 amNet tangible asset?

This post has been edited by lchan: Aug 26 2009, 10:32 AM

Can buy fkp share? But the more I read this, the more worry to buy the share.

i wonder when we can subscripe for the right issue ???

Nov 09 most likely. If things move fast, you may get your new shares in Oct 09. Mulpha's fate is directly linked to FKP now, the former having upped the ante during 2 rights issues and took up AU$ loan because of that.

FKP's share is now 66cent. I see 75 cent as a trigger point for me to buy Mulpha at any price below 50sen. Sdyney and Melbourne have taken the lead in the current recovery. Brisbane, in which FKP is based, is catching up slowly. More migration and recovery in industries located in Brisbane are the bets now. If FKP's share reaches AU$1, Mulpha will be great value at 50sen or below. Mulpha will likely be RM0.80 to RM1.00 then for me. This is because Mulpha Australia's loan restructuriing will be very easy.

In theory, Mulpha may even sell to suitors all its share in FKP at AU$1 to pay susbstantially all its short term loan. That will boost Mulpha price to even beyond RM1. But retirement village biz is a long term biz Mulpha is unlikely to sell.

So, the likelier scenario is that Mulpha may raise one more rights issue in 2010 or 2011. All depend on how the economy performs. All in all, if you have cash to subscribe rights issue and patience, Mulpha offers good value if there is no another crisis in the next 24 months.

Q209 excl share of FKP impairment, Mulpha was making 26m.
June experienced good property sales in Aus.

Its investment in mudajaya is worth 2/3 of its market cap. -> catalyst
as mudajaya is experiencing structural chg.

Its hospitality segment experiencing huge hit. so offset its good performance in property segment.

cash call would brought down its value. Mulpha mgmt , imo, are looking to use co money to privatise itself and move to Sg for listing status.

http://todayfinancialworld.blogspot.com

short - mid term i dont think small investors would benefit from Mulpha.
Long term, it might be gone.

http://todayfinancialworld.blogspot.com

Hi:

Can you eleborate how it may want to and be able to take it private and relist in Singapore, considering it has been listed in Msia for >20 years and how existing shareholders would be disadvantaged or short-changed if such a guessed move takes place?

Please explain too how it might be gone in the long run?

You may know sth I don't. Your enlightenment, please. Thx.

based on the Malaysia land that mulpha have, personally I don't think they want to go to Singapore. However I do agree the investor are unable to benefit from this stock in short time.

Sell and go buy US exchange.

same vf me jus bought this share, when it want up again? t