Stamford Tyres: Whopping return on investment in less than 10 years
IN 2003 and 2004, a Stamford Tyres-Tan Chong International joint venture took up a 40% stake in SRITP, which is mainly involved in the wholesale and distribution of tyres in China.
Last Friday, Stamford Tyres announced an agreement by that joint venture company to sell the stake for S$44 million.
Stamford Tyres will receive S$22 million as it owned 50% of the joint venture, Tyre Pacific (HK) Ltd.
Stamford Tyres' initial investment in SRITP had been USD1.2m, or about S$1.5m, said Stamford Tyres CFO Conson Sia.
The S$44 million cash consideration to be paid by Sumitomo Rubber Industries was based on a price earnings ratio of 8.19 times and 2.65 times of NTA for SRITP as at 31 December 2011.
With the purchase, Sumitomo Rubber Industries would own 100% of SRITP.
Following the transaction, Stamford Tyres said it would continue to maintain a strong presence in China through the wholesale and distribution of tyres in the tier-one cities of Beijing, Shanghai and Guangzhou.
This business is conducted via Tyre Pacific HK.
Mr Wee Kok Wah, President & CEO of Stamford Tyres, said the company intended to use part of the proceeds from the sale of its deemed stake in SRITP to work with Sumitomo Rubber Industries to expand fast growing areas such as India and South Africa.
Stamford is also considering using the proceeds to fund the redevelopment of one of its main warehouses at 21/21A Lok Yang Way as Singapore continues to be a base for it to support its steadily growing Southeast Asian business.
Read the full press release on SGX website.
Recent story: STAMFORD TYRES' CNY open house: Good crowd, good food, good fun
Duty Free International: Independent director accumulates shares
Chew Soo Lin, 63, who was appointed an independent director of Duty Free International in August 2011, has made his initial purchases of its shares since coming on board the company.
He bought 250,000 shares at 21.5 cents and 100,000 shares at 22 cents on 30 March 2012 and 29 March, respectively.
As a result, he owns 1,558,615 shares, or a 0.1398 % stake in the Singapore-listed company which is the largest local duty-free trading group in Malaysia.
The purchase prices are near the lowest point of its 52-week trading range of 17-42 cents.
The low-profile Mr Chew is executive chairman of Khong Guan Flour Milling, which is listed on the SGX, and trades wheat flour and other edible products.
(Side comment: Khong Guan has the plainest annual report possible -- there are absolutely no pictures of the business or management or even the board of directors!)
Recent story: ESMART: Way paved for injection of duty-free business cash cow
JEL Corp proposes to issue 2 billion shares to Sam Goi
Billionaire Sam Goi is set to become the No.1 shareholder of JEL Corporation, which has entered into an agreement to place out 2 billion new shares of JEL at 0.6999 cent a share.
The placement will raise S$13.998 million for JEL which is currently on the watch-list of the SGX-ST. Among other things, the placement is meant to help JEL meet the criterion of market capitalization, with a view to be removed from the watch-list.
If approved by shareholders at an EGM, the placement will see Mr Goi's current stake of 14.99% soar to 57.75% of the enlarged issued and paid-up share capital of JEL.
Such a massive issue of new shares will result in significant dilution for existing shareholders.
Prior to the announcement of the share placement, JEL shares were active and shot up 57.1% last Friday to 1.1 cents.
Read the press release on SGX website.
For more on JEL and the rise of Sam Goi's prominence as its investor, read: JEL, PLASTOFORM: Big investors getting big in small caps
Comments
Refer to the annoucement of Berjaya corp increase stake to 24.97%, the following is interesting:
5.6 Non-compliance of public shareholding spread by AHB
As at 30 April 2012, AHB announced that it has yet to comply with Paragraph 8.02(1) of the Main Market Listing Requirements of Bursa Securities in relation to the public shareholding spread requirement, which was 24.22% as at 16 April 2012. Notwithstanding that Bursa Securities had via its letter dated 27 December 2011 granted AHB a further extension of time until 30 June 2012 to comply with the public shareholding spread requirement, AHB has yet to announce any rectification plan to address the shortfall in the required public shareholding spread of 25%.
Atlan has to reduce it's stake so that it comply with the rule of 25% public shareholding spread by 30 June 2012. Once Atlan does it, distinct continental will lose it's over 50% of voting rights and Berjaya may then buy even more in order to trigger a takeover or having more than 50% voting rights.
It may then take Duty Free Internation off SGX by having an exit offer for duty free international. By lookin at the price offered for ATLAN, the offer price for duty free international may be 60 cents.
Atlan share price has reached a high since year 2000, while duty free price is going up.
Watch up for more actions, especially duty free internation listed in SGX. BErjaya and other fund manager has already started to accumulate.
Price of Duty Free International is 31-32 cents currently.