Author: Investmoolah

Why Hyflux Perpetual and Preference Holders should Vote “No” to the Restructuring.

Hyflux has released its offer to bondholder, perpetual holders towards restructuring of the company after the Tuaspring’s offer.  Details of Offer for Perps and Pref Shareholders To summarise, Hyflux has offered to exchange the $900 million in value for Perpetuals and Preference shareholders into 10.26% of the restructured company + a $27 million cash repayment. Based on Salim action of injecting $400 million to obtain 60% of the restructured company, it can be seen that 10.26% of the company, worth roughly $67 million, was given to perpetual and preference shareholders. This means Preference and perpetuals holders will get about...

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Investing mistake in Ezion Holdings

Ezion Holdings thus far is probably the largest investing mistake I have made so far. So perhaps its good to do an after action review of it. Turn of Events- The straw that broke the Camel’s back The recent announcement of Ezion not having obtained its working capital financing is the most damaging issue. My mistake was that I had assumed when Ezion paid its lenders on 3 July 2018 the consent fee to obtain the working capital loan, it would have meant that the loan will be given soon after; however, it seems not to be the case....

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The Curious Case of Sino Grandness (Part 2)

6 months back, I wrote about my interesting observation of Sino Grandness (SFIG). In the last few days, TTA a company which has loaned to SFIG made an announcement that SFIG has not paid back the loan amount of about RMB 140 million. This is despite the company having extended the maturity date of their loan once. The link can be found here In my opinion, given that SFIG has a cash balance of RMB$416million, it should not be possible for SFIG to miss the repayment of RMB$140 million. Increasingly High Receivables and Dicey Cashflow   One thing that is...

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Year End 2018 Portfoilo Update

It has been a while since the last update of my portfolio; since then the market has experienced a turbulent time of decline. Among my portfolio, a stock of mine, First Ship Lease Trust (FSL Trust)has announced a drastic corporate actions. This too has spurred me to react. Divestment- First Ship Lease Trust In Nov 2018, FSL announced plans to issue a non renounceable equity raising by issuing new shares at a ratio of 3 new shares for every 2 shares at a price of $0.045. The price of the new shares was at a massive discount to FSL’s...

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First Ship Lease Trust (FSL) – Q3 Earnings

FSL has released its Q3 results. All in all, the trust has survived the threats from banks. However from its recent Q3 results, it seems there has been some damage to the company. Higher Financing Cost Reading its latest Q3 reports, it seems the new bank loans have a higher margin than the old loans interest of (2.8%+ LIBOR). The new loan arraignments have a weighted average of (4.012% + LIBOR). This means as of now the loan’s interest rates are about 6.55%. This is quite high and will definitely affect my previous valuation of FSL. Coupled with the refinanced...

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Review of Silverlake Axis

In recent times, Silverlake Axis’s share price has fallen from its 50-60 cents range to that of 41.5 cents as of today. The question on people’s mind is probably, if the current share price reflects the value of the company. As a start, let’s recap on the business of Silverlake. Brief description of Silverlake Axis Silverlake Axis’s main competency lies in the core banking system industry and insurance. It produces software which is used to run the operations of financial institution. As the core banking system is a critical system for the bank, there is a high risk and...

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Review of Silverlake Axis

In recent times, Silverlake Axis’s share price has fallen from its 50-60 cents range to that of 41.5 cents as of today. The question on people’s mind is probably, if the current share price reflects the value of the company. As a start, let’s recap on the business of Silverlake. Brief description of Silverlake Axis Silverlake Axis’s main competency lies in the core banking system industry and insurance. It produces software which is used to run the operations of financial institution. As the core banking system is a critical system for the bank, there is a high risk and...

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Is Ezion Turnaround in Sight?

Ezion Holdings is in the business of chartering out its liftboats, service rigs and barges etc. The company recently underwent a financial restructuring to save itself. It led to a massive dilution of old shareholders who are unlikely to recover their cost price.What went Wrong and its Financial RestructuringEzion’s management made the big mistake during the oil boom days to borrow money extensively to buy oil support equipment thinking that chartering rates will continue to be that high. In 2015, oil prices went down and Ezion’s equipment were chartering at much lower rates and the company was unable to...

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Is Ezion Turnaround in Sight?

Ezion Holdings is in the business of chartering out its liftboats, service rigs and barges etc. The company recently underwent a financial restructuring to save itself. It led to a massive dilution of old shareholders who are unlikely to recover their cost price. What went Wrong and its Financial Restructuring Ezion’s management made the big mistake during the oil boom days to borrow money extensively to buy oil support equipment thinking that chartering rates will continue to be that high. In 2015, oil prices went down and Ezion’s equipment were chartering at much lower rates and the company was...

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Is There Something Wrong with Singapore’s Accounting Practices?

With the recent spate of SGX companies taking huge write down of assets and frauds still happening as frequently, it got me wondering- Does Singapore have a weak financial regulator or is it there something wrong with our accounting practises?Case 1- Noble Write DownMany of us will be aware of Noble’s huge write down on its financial derivatives and the subsequent loss in shareholder value.  All these while, an independent research house, Iceberg, has been indicating that Noble had over-valued its financial derivative assets. What made it worse was that Noble’s own external auditor, Ernest & Young, had for...

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Is There Something Wrong with Singapore’s Accounting Practices?

With the recent spate of SGX companies taking huge write down of assets and frauds still happening as frequently, it got me wondering- Does Singapore have a weak financial regulator or is it there something wrong with our accounting practises? Case 1- Noble Write Down Many of us will be aware of Noble’s huge write down on its financial derivatives and the subsequent loss in shareholder value.  All these while, an independent research house, Iceberg, has been indicating that Noble had over-valued its financial derivative assets. What made it worse was that Noble’s own external auditor, Ernest & Young,...

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Hyflux Sale of Tuaspring and the Financial Damages – Part 2

In my previous post, we discussed about the possibility of Hyflux taking a s$600-$750 million impairment for the sale of Tuaspring. The next order of question is to find out the effects of the impairment on vested interests in Hyflux.If Hyflux Closes ShopBasically Hyflux has 4 vested parties. Should all of Hyflux’s assets be sold off (cease to be a going concern), below is the order in which these parties will have a share of the proceeds:(i) Firstly, secured lenders (e.g. Banks such as Maybank)(ii) Unsecured Bondholders (who collectively hold $265 million of Hyflux bonds)(iii) Perpetual and Preference Shareholders (collectively having a $900 Million Stake)(iv) Lastly...

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Hyflux Sale of Tuaspring and the Financial Damages – Part 2

In my previous post, we discussed about the possibility of Hyflux taking a s$600-$750 million impairment for the sale of Tuaspring. The next order of question is to find out the effects of the impairment on vested interests in Hyflux.If Hyflux Closes ShopBasically Hyflux has 4 vested parties. Should all of Hyflux’s assets be sold off (cease to be a going concern), below is the order in which these parties will have a share of the proceeds:(i) Firstly, secured lenders (e.g. Banks such as Maybank)(ii) Unsecured Bondholders (who collectively hold $265 million of Hyflux bonds)(iii) Perpetual and Preference Shareholders (collectively having a $900 Million Stake)(iv) Lastly...

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