EVACUATION OF BOUSTEAD PERSONNEL FROM LIBYA
http://info.sgx.com/webcoranncatth.nsf/V...E0033EB41/$file/Boustead_Announcement-Evacuation_of_Boustead_Personnel_from_Libya-21.02.2011.pdf?openelement
A very dramatic news announcement heading haha ! Hope the situation improve so that peace will be restored in the country. I think it clearly shows that there is always risk present in emerging countries. Boustead balance sheet is strong so this isn't an existential threat. But I shudder to think how this would have impacted a much much weaker company with a very shaky balance sheet !
Thanks to the restructuring of the Al Marj Township project, Boustead now only has a 35% stake and a passive role. This in turn means that Boustead can evacuate its staff and work can stop, but it can always resume without the staff flying back in immediately as Boustead have ceded majority control of the project. Of course, the issue now is how severe the cost overruns will be. But I guess FF Wong has learnt a very valuable lesson from venturing into Libya!
Quote:PURCHASE OF REMAINING SHAREHOLDING INTEREST IN BOUSTEAD PROJECTS PTE LTD
Following the Transaction, the Company’s effective interest in Boustead Projects
will be increased from 91.67% to 100%.
The purchase price (the “Purchase Priceâ€) to be paid to NWP by the Company for
the Sale Shares is S$16 million.
Based on the audited accounts of Boustead Projects for the year ended 31 March
2010 (“FY 2010â€) the net book value and net profit after tax attributable to the
Sale Shares are S$10.10 million and S$1.64 million respectively.
the PE of 10 hah? timing of buying is quite interesting, when the order secured for Boustead Projects was very low this FY.
sure won't buy when the profit and prospects are good. must pay a great price for it.
Business Times - 22 Feb 2011
Boustead evacuating staff from project in Libya
MAINBOARD-listed Boustead is evacuating 31 of its non-Libyan staff from the country amid continuing protests and violence. The staff - mainly Singaporeans and Malaysians - were working on the Al Marj Township Project, east of the capital of Libya, Tripoli.
The company said yesterday that it was suspending all operations in Libya until peace is restored and the full extent of the political situation can be ascertained so that the 'safety of all Boustead staff is not compromised'.
Boustead is currently a 35 per cent shareholder of the township project following a restructuring which saw its joint-venture partner - Libya's General Construction & Building Company (GCBC) - taking control with majority ownership. Boustead is writing off a net loss of $1.1 million from the restructuring.
'In the interim absence of the Boustead staff from the Township Project, GCBC shall continue to manage and operate the construction of the Township Project,' Boustead said.
Boustead said it had successfully transported all its staff to Tripoli, and several have already flown back since Sunday. The rest could leave this week.
'Due to the current uncertainty of the situation in Libya, the company is presently unable to ascertain to what extent, if any, the completion of the Township Project will be affected,' it said. 'The company will make additional announcements as and when there are further developments.'
I did not expected price to drop so much with this news. Caught a falling knife..
(22-02-2011, 09:13 PM)mrEngineer Wrote: [ -> ]I did not expected price to drop so much with this news. Caught a falling knife..
Are you buying Boustead for the business or because of the share price?
For prudence, company may have to write off their investment in Libya. I expect them to do it and when things in Libya cools down, they may recover a portion of the write off.
35% stake of US$175m estimated project value is still about US$62m to write-off. Even if they recover half (optimistically speaking) it's still quite a significant amount.