Oakwell Engineering Limited

josephyeo
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10 years 8 months ago #15747 by josephyeo

Oakwell Engineering Limited was created by josephyeo

Quote :

1. INTRODUCTION
The Board of Directors of Oakwell Engineering Limited (the “Company”, and collectively, with its subsidiaries, are referred to as the “Group”) wishes to announce that following the execution of the Letter of Intent on 23 May 2013, it has entered into a conditional sale and purchase agreement (“CSPA”) with Sonepar Asia Pacific Limited (“Sonepar”) and Elec Holdings Limited (“Elec”) (collectively referred to as the “Purchasers”) on 20 August 2013 for the sale of 100% of the total paid-up and issued share capital (the “Sale Shares”) of Oakwell Distribution (S) Pte Ltd (“ODS”) for a base consideration of S$70,000,000 (the “Base Consideration”) with an adjustment amount (“Adjustment Amount”) (collectively, referred to as the “Consideration”) in accordance with the terms and conditions of the CSPA (the “Proposed Disposal”).

Comments : Just to share with you above quote on the proposed sale of a subsidiary by Oakwell.
Oakwell is currently capitalised at $54.1 mil based on share price of 8.1 cts and 668.3 mil shares. The proposed sale of subsidiary is agreed at $70 mil which is 29% above it's current capitalisation.For details, pls refer to their annoucement today (21 august 2013).

would anyone care to comment???

onefinanceasia.com/.../89769-OAKWELL-ENGINEERING-LIMITED.html...

Project_Bungalow_Signing_SPA.pdf

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Val
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10 years 8 months ago #15749 by Val

Replied by Val on topic Oakwell Engineering Limited

TQ Joseph. U think can buy at this prx?

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josephyeo
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10 years 8 months ago #15758 by josephyeo

Replied by josephyeo on topic Oakwell Engineering Limited

Hi Viva,

Honestly i am not in a position to advise. But i am vested

for the following reasons :

1.the company is capitalised at $54.1 mil and the sale of

the subsidiary is agreed on at a price of $70.0 mil. this

is $15.9 mil more than the capitalisation.

2. the term of payment is in cash. 80% on final agreement

and balance of 20% over 2 years.

3.there is a commitment that some cash will be

distributed as dividend when the whole deal is through

4. at current price of 8cts I rate my investment as low

risk given the commitment on dividend which i think is

likely to be quite substantial relative to it's share

price and the amount of cash the company would be getting

assuming that the deal pull through.

Above are just my feelings about the my investment. Do,

do own analysis n draw your own conclusion.

Rgds n wish you all the best !
joseph

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josephyeo
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10 years 8 months ago #15795 by josephyeo

Replied by josephyeo on topic Oakwell Engineering Limited

It seems that the management is committed to distribute dividend from the sale of the subsidiary. I believe the dividend will be quite meaningful as happened in other companies when they decide to sell off parts of their business. In this case the sum involved is very substantial ... $70 million which is higher by close to 30% than the company capitalisation of $54.1 millions.(The $54.1 millions is based on share price of 8.1cts) See quote below on how they intend to use the proceeds from the sale :

Quote :

7. INTENDED USE OF THE PROPOSED DISPOSAL PROCEEDS

It is the intention of the Directors to deploy the proceeds from the Proposed Disposal to fund future acquisitions and its working capital, consider reducing its bank borrowing and provide a dividend distribution.

The Company will make the necessary announcements as and when such funds are materially disbursed and subsequently provide a status report on the use of such proceeds and any material deviations therefrom in its annual report.

Pending the deployment of the net proceeds from the Proposed Disposal, the net proceeds may be deposited with banks and/or financial institutions, invested in short-term money market instruments and/or marketable securities, or used for any other purpose on a short-term basis, as the Directors may, in their absolute discretion, deem fit.

onefinanceasia.com/.../89769-OAKWELL-ENGINEERING-LIMITED.html...

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josephyeo
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10 years 8 months ago #15812 by josephyeo

Replied by josephyeo on topic Oakwell Engineering Limited

Re : Oakwell

Below quote from their announcement on 21st aug 2013 fyi

5. COMPLETION DATE

(a) The completion of the Proposed Disposal (“Completion”) shall take place on 31 October 2013 (“Completion Date”) or any other date as may be mutually agreed in writing between the parties to the CSPA.

(b) The Purchasers will not be obliged to complete the purchase of the Sale Shares under the CSPA unless the Company complies fully with its obligations under CSPA and unless the purchase of all of the Sale Shares is completed simultaneously.

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josephyeo
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10 years 8 months ago #15835 by josephyeo

Replied by josephyeo on topic Oakwell Engineering Limited

share price : 8.1 cts (as of 26 aug 2.22pm)

sale price : 10.4 cts (based on agreed price of $70 mil over 668 mil shares)

commitment to disribute proceed of sale .. quantum not known yet but should be substantial relative to share price.

see original annoucement by company on 21 aug 2013 sgx

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