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TSprophetjul
post Mar 13 2019, 08:34 AM, updated 5y ago

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Malaysian companies luvs to do this. Genting has been doing this for years.
Now Ekovest.

https://www.thestar.com.my/business/busines...s-stake-in-pls/


QUOTE
The company has reported losses for the past three financial years until March 31, 2018.



This post has been edited by prophetjul: Mar 13 2019, 08:36 AM
Jordy
post Mar 13 2019, 01:21 PM

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QUOTE(prophetjul @ Mar 13 2019, 08:34 AM)
Malaysian companies luvs to do this. Genting has been doing this for years.
Now Ekovest.

https://www.thestar.com.my/business/busines...s-stake-in-pls/
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RM76.5 mil only? So little? Wait until you see this RM1.85 bil RPT deal cool2.gif

https://www.thestar.com.my/business/busines...kes-a-comeback/
TSprophetjul
post Mar 13 2019, 01:27 PM

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QUOTE(Jordy @ Mar 13 2019, 01:21 PM)
RM76.5 mil only? So little? Wait until you see this RM1.85 bil RPT deal cool2.gif

https://www.thestar.com.my/business/busines...kes-a-comeback/
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Screwing the shareholders
Jordy
post Mar 13 2019, 02:47 PM

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QUOTE(prophetjul @ Mar 13 2019, 01:27 PM)
Screwing the shareholders
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Ironically in Tropicana's case, Danny Tan is also the major shareholder with over 55% shareholding. So does that mean he is screwing himself? brows.gif
Also not forgetting the invincible Lim Wee Chai who bought a 10% stake about 2 years ago is the current Chairman of Tropicana.
Does that mean Danny Tan is screwing him as well knowing very well that he built the world's biggest glove maker single handedly? hmm.gif

Well, I don't know but some RPTs have proven to be beneficial to the company's growth. But of course if left unchecked, most RPTs are just means for the shareholders to cash in a quick buck.
In this case, I am just a small tiny shareholder of Tropicana, I can only watch as Danny Tan screws with my share of the company bye.gif
aspartame
post Mar 14 2019, 10:23 PM

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QUOTE(Jordy @ Mar 13 2019, 02:47 PM)
Ironically in Tropicana's case, Danny Tan is also the major shareholder with over 55% shareholding. So does that mean he is screwing himself? brows.gif
Also not forgetting the invincible Lim Wee Chai who bought a 10% stake about 2 years ago is the current Chairman of Tropicana.
Does that mean Danny Tan is screwing him as well knowing very well that he built the world's biggest glove maker single handedly? hmm.gif

Well, I don't know but some RPTs have proven to be beneficial to the company's growth. But of course if left unchecked, most RPTs are just means for the shareholders to cash in a quick buck.
In this case, I am just a small tiny shareholder of Tropicana, I can only watch as Danny Tan screws with my share of the company bye.gif
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I wonder how they decide the price of RCPS to be RM1.20. Is this price beneficial to DT cos the NTA is higher. OTOH, market price of ordinary share is RM0.90. But they are convertible ....
Jordy
post Mar 15 2019, 12:18 PM

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QUOTE(aspartame @ Mar 14 2019, 10:23 PM)
I wonder how they decide the price of RCPS to be RM1.20. Is this price beneficial to DT cos the NTA is higher. OTOH, market price of ordinary share is RM0.90. But they are convertible ....
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QUOTE
The issue price of RM1.20 per TCB RCPS was determined after taking into consideration the five (5) day volume weighted average market price (“VWAMP”) of ordinary shares in TCB (“TCB Share(s)”) up to and including 23 January 2018, being the full trading day prior to the date of this Announcement of RM0.8904.

Based on the Conversion Ratio (as defined in Appendix III of this Announcement) of the TCB RCPS, the implied conversion price of the TCB RCPS (“Implied Conversion Price”) is fixed as follows:
(i) RM1.20 from the date of issue of the TCB RCPS up to the fifth (5th) anniversary; and
(ii) RM1.00 any time after the fifth (5th) anniversary of the date of issue of the TCB RCPS up to the day immediately preceding the tenth (10th) anniversary from the date of issue of the TCB RCPS.

Based on the above, the Implied Conversion Prices of RM1.20 and RM1.00 represents a premium of RM0.3096 and RM0.1096, respectively, or a premium of approximately 34.8% and 12.3%, respectively, to the five (5) day VWAMP of TCB Shares up to and including the LPD of RM0.8904.


Notice that even the year was wrongly typed in the official circular to shareholders.

Apart from that, the RCPS carries quite a low nominal dividend rate of between 1% to a maximum of 3%.

So based on the above extracts, it seems like a good deal for the existing shareholders if the conversion is done after the 5th anniversary, provided that the lands have been developed/sold and converted into tangible profit over the period of 5 years.
aspartame
post Mar 16 2019, 04:41 PM

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QUOTE(Jordy @ Mar 15 2019, 12:18 PM)
Notice that even the year was wrongly typed in the official circular to shareholders.

Apart from that, the RCPS carries quite a low nominal dividend rate of between 1% to a maximum of 3%.

So based on the above extracts, it seems like a good deal for the existing shareholders if the conversion is done after the 5th anniversary, provided that the lands have been developed/sold and converted into tangible profit over the period of 5 years.
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Why were the assets bought privately and then injected into the company? And, most of the lands in Johor....why now?
Jordy
post Mar 16 2019, 05:35 PM

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QUOTE(aspartame @ Mar 16 2019, 04:41 PM)
Why were the assets bought privately and then injected into the company? And, most of the lands in Johor....why now?
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These assets were bought via Danny Tan's own private vehicles over the years (I was of the opinion that he wanted to ride on the property boom in Johor). So he bought these parcels of land at a cheap price (when Danga Bay was just rising) and now that the area is maturing, it is time for him to let them go for profit. The best way to securely dispose of ALL the land he owned is through Tropicana. If he were to sell those parcels of land to outsiders, it will take him years to go through all the deal-making. Tropicana has the ability to take up all the land he has.
aspartame
post Mar 16 2019, 06:18 PM

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QUOTE(Jordy @ Mar 16 2019, 05:35 PM)
These assets were bought via Danny Tan's own private vehicles over the years (I was of the opinion that he wanted to ride on the property boom in Johor). So he bought these parcels of land at a cheap price (when Danga Bay was just rising) and now that the area is maturing, it is time for him to let them go for profit. The best way to securely dispose of ALL the land he owned is through Tropicana. If he were to sell those parcels of land to outsiders, it will take him years to go through all the deal-making. Tropicana has the ability to take up all the land he has.
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The companies were all formed in 2014 , I think ... the whole deal was worth at 1.8b, being cash 300+mil plus RCPS worth 1.5b... presumably the lands were bought at 1.5b (cos that was the amount owed by the companies to DT)...this debt is now being taken over by using RCPS... so, is his profits about 300mil over 5 years?

Another question I dun understand, if you have time maybe can look at it.... I remember Clause 2.1.2 ??? where market value of the lands were said to be over 3b... then the most right hand side column shows "value to vendors " or something like that is about only 300mil...
then got one column the value is 160.00 or something.. like got error
Jordy
post Mar 17 2019, 06:18 PM

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QUOTE(aspartame @ Mar 16 2019, 06:18 PM)
The companies were all formed in 2014 , I think ... the whole deal was worth at 1.8b, being  cash 300+mil plus RCPS worth 1.5b... presumably the lands were bought at 1.5b (cos that was the amount owed by the companies to DT)...this debt is now being taken over by using RCPS... so, is his profits about 300mil over 5 years?

Another question I dun understand, if you have time maybe can look at it.... I remember Clause 2.1.2 ??? where market value of the lands were said to be over 3b... then the most right hand side column shows "value to vendors " or something like that is about only 300mil...
then got one column the value is 160.00 or something.. like got error
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Those figures on the right hand of the table are showing the revaluation surpluses on all the land which is the total realised profit attributed to the vendors based on the book value and revised NA as of 30 September 2018. So yeah you could say that the 343.7mil is the profit for the Tan's over 5 years of "babysitting" those lands.

Land banking is a lucrative business, provided that you have the holding power and you have the ready buyer when the time is right, just like what DT is doing.

But putting the RPT aside, this is a property development business. Just think of it as a normal land deal.

I trust that if this deal is detrimental to the shareholders interest, the other substantial shareholder which has nothing to do with the Tan's would have surely objected to this deal. Since TS Lim Wee Chai (who himself have built such a huge conglomerate) can swallow this deal, I trust his judgement.

We just sit back and see because I believe that there is still more room for Tropicana to grow once the property market recovers.

Do note that the RCPS is valued at between RM1 - RM1.20. The share price has to somehow meet that price down the road, or else TSDT would lose out. From the current price range of 0.8x, there is still about 20% of premium to grow.
TSprophetjul
post Mar 20 2019, 01:12 PM

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Lim explains Ekovest’s investment in his loss-making plantation ops

KUALA LUMPUR: Businessman Tan Sri Lim Kang Hoo, having recently sold his 24.23% stake in PLS Plantations Bhd to Ekovest Bhd, said he is confident that the plantation group will return to profit in the financial year ending March 31, 2020 (FY20), driven by an increasing palm oil production.

“In PLS Plantations, we already have a palm oil-producing business, in its best timing whereby trees are mature. They are about six to seven years old, so that is an area where our profit may be coming from,” Lim told the press after PLS Plantations’ extraordinary general meeting (EGM) yesterday.

Shareholders at yesterday’s EGM granted approval for PLS Plantations to venture into durian plantations. The company will be buying a 70% stake in Dulai Fruits Enterprise Sdn Bhd, a downstream durian-based product exporter.

Lim said the group’s new durian plantation venture will see substantial growth. “From Dulai Fruits Enterprise, we already got RM3 million based on a profit guarantee [for FY20], so we expect that business to grow very fast. It is not concentrating at just one place; we are looking at the regional market to grow the business.

“On one hand, we will grow the downstream durian business in Dulai Fruits Enterprise. For the long term, we have the durian plantations to support the supply of the downstream business,” he added.

Ekovest’s 24.23% stake acquisition of PLS Plantations from its controlling shareholder Lim for RM76.5 million in cash raised eyebrows. It begs the question: Why would a construction outfit venture into oil palm and durian plantations?

By the same token, Lim has managed to unlock his investment value in PLS Plantations. After the stake sale, Lim will be deemed interest [in PLS Plantations] through his 32.37% stake in Ekovest.

“Basically, if you look at my companies, Ekovest is [diversifying] into plantation, so that is the reason why we are putting two groups together. Ekovest had taken over the first block (24.23% stake); we will streamline the [plantation] business into the group,” said Lim.

Lim said the diversification is a synergistic and logical business expansion from PLS Plantations’ existing core business in forest and oil palm plantations.

“After acquiring Dulai, we aim to command a substantial market share for the export of downstream durian-based products. Now, we intend to vertically expand this business by focusing on enhancing the durian plantations for upstream capabilities to meet growing demand for durians, which has consistently outstripped supply.

“We intend to go into large-scale and systematic plantations for this expansion. We are also in discussions with strategic investors who can co-invest with us in this durian plantation business.”

For the long term, Lim said PLS Plantations envisions that durian plantations can be Malaysia’s new revenue stream from the export segment. “To date, PLS Plantations has commenced durian plantations on a large scale, and we have planted 30,000 acres (12,140.57ha) of oil palm.”

PLS Plantations’ share price closed unchanged at 96 sen, with a market capitalisation of RM313.63 million. Ekovest fell 1.5 sen or 2.73% to 53.5 sen, valuing it at RM1.15 billion.
TSprophetjul
post Aug 7 2019, 10:13 AM

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HERE WE GO AGAIN


KUALA LUMPUR (Aug 6): Tan Sri Lim Kok Thay, via Kien Huat Realty III Ltd, is selling 46% of the common stock in Nasdaq-listed gaming and entertainment company, Empire Resorts Inc, to Genting Malaysia Bhd (GenM) for US$128.6 million cash or RM538.8 million.

The related party transaction is priced at US$9.74 per share of the common stock, some 13.2 million in all, which represent about 35% of the outstanding voting power of Empire on a fully diluted basis, after conversion of all outstanding preferred stocks into common stocks.

Kien Huat currently controls 84% stake in Empire, which has been loss making for the past two decades, according to Bloomberg. Empire posted a net loss of US$155.36 million for the financial year ended Dec 31, 2018 — the biggest ever loss.

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Following the proposed share acquisition, GenM and Kien Huat will join hands to take Empire private at the same consideration of US$9.74 per share of common stock.

GenM, in a stock exchange filing today, said it has inked a binding term sheet with Kien Huat for its wholly-owned Genting (USA) Ltd to undertake the acquisition, which GenM said will be funded by internal funds. As at March 31, 2019, GenM's cash and cash equivalents stood at RM7.92 billion, while its debts was at RM9.68 billion.

Empire owns and operates Resorts World Catskills (RWC), a casino resort situated on a 1,700-acre site in New York.

Empire also owns and operates Monticello Casino and Raceway (MCR), which began operations in 1958 in Monticello, New York, and features an electronic gaming machine and harness horse-racing facility. The EGM operations and food and beverage service at MCR ceased in April this year and was consolidated with RWC. Empire also has a sportsbook and digital gaming collaboration with an affiliate of Bet365 Group Ltd, a British online gaming company.

GenM said the proposed acquisition is subject to, among others, receipt of regulatory approvals, including approval by the New York State Gaming Commission (NYSGC) and satisfaction of applicable regulatory requirements.

It expects the proposed acquisition to be completed in the third or fourth quarter of this year. “If a merger agreement with Empire is entered into and such conditions precedent are satisfied or waived, we anticipate that the proposed merger could be completed by the fourth quarter of 2019,” GenM added.

GenM does not expect the proposed exercise to have any material effect on its consolidated earnings and earnings per share for the financial year ending Dec 31, 2019 (FY19).

The casino operator said the rationale of the stake acquisition is to better position the Resorts World brand in the North-Eastern US gaming market, through more effective cross marketing with Resorts World Casino New York City.

https://www.theedgemarkets.com/article/kok-...ke-genting-msia
TSprophetjul
post Aug 13 2019, 04:20 PM

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Empire Resorts on the brink of filing for bankruptcy

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KUALA LUMPUR: Empire Resorts, Inc, in which Genting Malaysia Bhd (GenM) will buy a 46% stake from controlling shareholder Tan Sri Lim Kok Thay for US$128 million (RM538 million), is facing a liquidity problem so severe, it has prompted the US-based casino operator to consider filing for voluntary Chapter 11 bankruptcy.

To keep it going, Empire, in which Lim now controls 84% via Kien Huat Realty III Ltd, has revealed it is in dire need of fresh capital through a cash call, or a restructuring of its whopping debt of over US$400 million.

The news sent the Nasdaq-listed company’s share price on a dive to as low as US$8.11 yesterday — down US$1.23 or over 13%. At the time of writing, it was trading at US$8.26 apiece, down US$1.08 or 11.56%.

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Last Friday, debt-laden Empire highlighted to shareholders the option of filing for voluntary bankruptcy in the announcement of its second-quarter financials to the US Securities and Exchange Commission (SEC), noting the option would enable it to easier restructure its borrowings.

“We can offer no assurance that we will be in compliance with all obligations and covenants measured as of future quarterly periods within the next 12 months or that we will be able to obtain waivers or other relief from the lenders, if necessary.

“If the company determines to not make a specified equity contribution, or interest and principal payments as they become due, unless the lenders under the term loan facility and revolving credit facility waive or eliminate the financial covenants, or otherwise restructure our existing debt agreements, Montreign Operating [Company, LLC] will be in default under these agreements and the lenders under such agreements can immediately declare all loans due and payable,” said the US casino operator, adding that Montreign Operating would likely be unable to pay all such obligations.

Montreign Operating, its indirect wholly-owned subsidiary, owns and operates Resorts World Catskills, a casino resort on a 1,700-acre (687.97ha) site of a four-season destination resort in Sullivan County, New York. It is approximately 90 miles (144.84km) from New York City.

The casino’s revenues have not surpassed costs since its opening in February 2018. Hence, Empire is currently generating operating losses, with a net loss of US$73 million in the six months ended June 30.

Empire’s long-term debt of US$533.68 million includes the Term A Loan amounting to US$60.4 million and Term B Loan totalling US$439.1 million. The Term A Loan will mature on Jan 24, 2022 and the Term B Loan on Jan 24, 2023, according to the filing with the SEC.

“Given our continuing negative cash flows from operations, and to meet our expected cash needs for the next 12 months and over the longer term, we will be required to obtain additional liquidity sources or possibly restructure our existing debt and other obligations.

“If acceptable terms of a restructuring cannot be accomplished, we may not have enough cash and working capital to fund operations, and satisfy the obligations of, Montreign Operating beyond the near term, which raises substantial doubt on our ability to continue as a going concern,” said Empire in the filing.

“As a result, we may be required to seek to implement an in-court proceeding under Chapter 11 of the US Bankruptcy Code ... if we commence a voluntary Chapter 11 bankruptcy case, we will attempt to make arrangements with new and existing creditors for additional liquidity facilities and the restructuring of Montreign Operating’s existing debt terms before presenting these arrangements to the bankruptcy court for approval.

“An in-court restructuring proceeding would cause a default on our debt with our current lenders,” it explained.

Empire also said on July 25, the Special Committee of its board of directors received a letter from Kien Huat indicating Kien Huat did not intend to provide further equity or debt financing to the company beyond its obligations under the Kien Huat Preferred Stock Commitment while the company remains a public company. Subsequently on Aug 5, the Special Committee received a non-binding proposal letter from Kien Huat, GenM and an affiliate of Kien Huat to buy the shares they do not already own for US$9.74 per common share — which is now higher than Empire’s current market price — according to the filing.

To recap, news of GenM buying the 46% stake in loss-making Empire from Kien Huat, Lim’s investment vehicle, had sparked fierce selling of its shares as well as those of its parent, Genting Bhd.

Some RM2.6 billion was wiped from GenM’s market capitalisation last Wednesday, and Genting saw RM1.8 billion evaporated following news of the related party transaction.

Judging by Empire’s latest announcement, it is likely its shareholders, including GenM, will have to inject more capital to sustain Resorts World Catskills’ operations moving forward.

In short, the substantial stake in Empire will cost GenM more than RM538.8 million in cash. Further, it is uncertain how long the casino outside of New York City will take to earn enough revenue to at least cover operating costs.

 

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