* STRAITS ASIA RESOURCES: The purchases of Legg Mason and Richard Ong were at prices below the target price set recently by Credit Suisse.
The research house had revised its estimates for thermal coal prices for 2010-13, and lowered its target price for Straits Asia from $2.80 to $2.50.
Credit Suisse maintained its 'buy' rating for Straits Asia, increasing its 2010 target PE from 8.4x to 12.7x following a lower risk-free rate from 12.8% to 11.5%.
(See: STRAITS ASIA RESOURCES, CHINA XLX, INDOAGRI: What analysts say)
Asia Water's BOO project in Shanxi (top) and BOT project in Zhejiang. Photo: annual report
* ASIA WATER TECHNOLOGY: A FIERCE fight is brewing at Asia Water Technology with the emergence of Egn Nominees Pte. Ltd as a substantial shareholder (6.4% stake) on May 26 this year, owning 12.6 million shares of Asia Water.
The stock is illiquid, which suggests that Egn’s purchase on the open market could have been of a chunk of the 13.6 million shares sold on May 22 by China Growth Opportunities Limited.
Egn has since bought more shares (some coinciding with large sales by China Growth Opportunities Ltd) to own a 20.43% stake – all this within just over a month.
Egn is not just buying and just sitting on its shareholding.
It has called for an EGM to be held at the SAF Yacht Club in Tanah Merah on Wednesday July 29 to remove the non-executive chairman, and two independent directors and a non-executive director of Asia Water.
Egn wants to appoint its director, Kareti Venkataramana, as a non-executive director of Asia Water and Peter Lai as an independent director.
Kareti Venkataramana is the founder of Elcomp group of companies, with interests in trading and distribution.
Peter Lai is Managing Director, Tembusu Partners Pte Ltd, a private equity investment firm in Singapore.
Aside from resolutions related to the board composition, what’s more interesting is the resolution calling for a cessation of proposed corporate actions announced by Asia Water.
The actions encompass investment, rights issue, restructure of obligations and a possible mandatory unconditional general cash offer.
The offer price is 2 cents a share, representing a massive discount of 77.8% over the recent transacted price of 9 cents. And it's an even sharper discount to the NTA of the company as at Mar 31 of 42 cents.
Egn described these discounts as being ‘seriously detrimental’ to the interests of shareholders.
Egn was none too happy with the company's financial performance either, noting that Asia Water had gone from a net profit of RMB53.3 million in FY07 to RMB17.9 million in FY08. In Q1 of this year alone, the net loss was RMB13.5 million.
Egn’s letter to shareholders on its issues with the company ran to 5 pages, ending with an invitation to shareholders to send any queries to
The water industry which Asia Water operates is enjoying a boom from China’s stimulus package but it would seem that Asia Water is finding itself swimming in hot water.
You can read the full (angry) letter from Egn to shareholders on the SGX website by clicking here.
Details of Egn's stock purchases are posted on Asia Water's website here.
