Boustead Singapore

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#11
I would think this contract is pretty significant. If you check, Salcon's FY 2010 revenue was S$55 million with a net profit of S$7.8 million, so this contract, being a multi-million $ one, would significantly increase Salcon's order book. Depending on the % of recognition of contract revenue this year, it would mean a significant boost to their bottom line and give Salcon a second consecutive year of profits.

The verdict on TTI and Big Box project will be out on Oct 15, 2010. Am hoping for a good result to act as a catalyst for Boustead to increase their recurring earnings. Big Grin
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#12
(08-10-2010, 12:11 PM)Musicwhiz Wrote: I would think this contract is pretty significant. If you check, Salcon's FY 2010 revenue was S$55 million with a net profit of S$7.8 million, so this contract, being a multi-million $ one, would significantly increase Salcon's order book. Depending on the % of recognition of contract revenue this year, it would mean a significant boost to their bottom line and give Salcon a second consecutive year of profits.

The verdict on TTI and Big Box project will be out on Oct 15, 2010. Am hoping for a good result to act as a catalyst for Boustead to increase their recurring earnings. Big Grin

I thought otherwise as the capacity looks quite small (1800cu m/day and 6000cu m/day). But nonetheless, reverse osomosis might be something more premium. Multi-millions just means more than 2 million.

Yes agree. Eagerly waiting for that catalyst too. But looks like Ho Lee might not budge.. its a joke to consider profit margins of ~15% for construction company..
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#13
Hi Mr. Engineer,

Yep I concede you might be right about the size of this project by Salcon; however it's not too difficult to surpass last year's revenue of S$55 million considering Salcon has already bagged two projects for FY 2011; the question is how many % of revenue will be recognized on each project that's all.

Anyhow, cash flows should be positive and I am looking forward to a nice interim dividend (1.5 cents or perhaps more?) to be announced in late Nov 2010. Wink
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#14
TT international survives. Now we will wait for Boustead to seal the Big Box deal with TT.

http://info.sgx.com/webcoranncatth.nsf/V...B0056BE54/$file/Announcement_-_Sanction_of_the_Scheme_by_the_Court_of_Appeal.pdf?openelement
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#15
Yep yeokiwi,

Here's the article from BT today. Big Grin

Business Times - 14 Oct 2010


Court clears TTI's debt plan with modifications

Ruling closes 2-year- long struggle for TTI, which drafted the scheme to stay afloat

By TEH SHI NING

(SINGAPORE) The Court of Appeal yesterday approved TT International's (TTI) debt-restructuring scheme, albeit with modifications.

OCBC Bank and Ho Lee Construction, the two dissenting creditors who took their fight to the highest court, also saw their concerns over the scheme's unfairness addressed in the changes made.

The court ordered that TTI pay all of OCBC's costs incurred in both the appeal and the earlier High Court proceedings, and half of Ho Lee's costs in both as well, adding that these are 'priority debts' not subject to the scheme.

Chief Justice Chan Sek Keong and Justices V K Rajah and Andrew Phang yesterday sanctioned the scheme, subject to changes to address the original's shortcomings.

'In particular, there is a lack of clarity to the milestones to be met in the implementation of the scheme and the methodology to be employed for assessing its ongoing viability,' the brief grounds of decision read.

To that end, the court appointed OCBC, Ho Lee and DBS Bank to the monitoring committee (MC) which oversees the scheme. They replaced three members, including TTI's wholly owned unit Akira Corporation.

It also gave the MC greater oversight. Every six months from Nov 1, scheme manager nTan Corporate Advisory will have to report to the MC on the company's ability to fulfil its scheme obligations.

Substantial transactions with related parties will also require the MC's approval, as will the company's budget, including operating expenses and professional fees.

Legitimate concerns have been voiced over the quantum of professional fees and expenses incurred by TTI in relation to the scheme, the court said. Some estimate that these amount to $23 million so far. All TTI's professional costs incurred after Aug 27, 2010 shall now be taxed by the High Court.

Other key disputes during the hearings, over adjudication of claims and voting classes, were also addressed. The modified scheme requires 50 per cent and 75 per cent in value of scheme creditors to approve of any procedural and substantive amendments respectively. Related creditors will vote in a separate class and their claims will rank after third-party creditors'.

The other changes addressed concerns over the rights of first refusal relating to redeemable convertible bonds, dilution shares and conversion shares.

This decision closes a two-year long struggle for TTI, which drafted the scheme in 2008 to stay afloat after racking up huge debts in the global financial crisis.

Executive director Julia Tong said TTI is 'thankful for the outcome' and will now 'embark on a new chapter of restructuring and growth to return value to all stakeholders'. This could involve an offer from Boustead Singapore to inject $150 million and revive TTI's stalled Big Box development, one which hinged on the scheme being passed and expires tomorrow.

As at last week, whether the scheme had received the 75 per cent approval from creditors needed to go before the court for sanction, was still a matter of contention. But the court yesterday said Ho Lee did not comply with directions on how its claim for loss of profits ought to be calculated. The scheme manager thus acted correctly in disregarding Ho Lee's claim, and the scheme met the requisite threshold.

Still, Ho Lee's managing director Benjamin Tan yesterday said Ho Lee was happy with the decision. 'It was never our intention for the company to go under,' he said, adding that the changes 'allow the necessary checks and controls to be in place - key transparency issues which were previously sorely missing'.

OCBC said its position is vindicated in the court modifying the terms and awarding OCBC full costs of the appeal. 'Moving forward, OCBC will work with TTI to implement the modified terms of the Scheme in the collective interests of TTI and the Scheme Creditors,' said group corporate communications head Koh Ching Ching.

The wider impact of the ruling could come when the court issues its 'detailed reasons' in due course, as schemes of arrangements are frequently used in Singapore to restructure debt.

Senior Counsel Lee Eng Beng of Rajah and Tann, who represented OCBC, said: 'The basic statutory provision actually lacks detail in a lot of aspects. This case presented an opportunity for the Court of Appeal to lay down principles and guidelines which will be very useful for companies which may have to invoke a scheme of arrangement in future.'

My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#16
It is pretty amazing that TTI actually survives.

I remembered my supplier was pointing to me at the Big Box construction site from a building in the nearby business park in 2009 and asked me what was wrong with the site.
I looked at the site and realised that the site was emptied of excavators, raw materials, workers, cranes etc.

Did not realise that the site belong to TTI...haha..
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#17
Let Boustead and TTI hammer out the details for Big Box. They have until Dec 1, and I am hoping for a very favourable arrangement which sees Boustead take the lion's share of the profits and cash flows. Boustead would have to commit S$150 million out of their cash hoard though, so it's a substantial commitment....

Business Times - 16 Oct 2010

Offer to TT Int'l extended to Dec


Boustead, TT Int'l defer deadline for agreement over Big Box by more than a month

By TEH SHI NING

DEBT-RIDDEN TT International has more reason to hope for a turnaround, after yesterday's expiry date on a 'white knight' offer from Boustead Singapore was extended by a month and a half.

Engineering group Boustead said yesterday its commitment to the offer made in August - to pump $150 million into TT International's stalled Big Box warehouse-and-retail project - still stands.

Both companies have agreed to extend the deadline to 'sign definitive agreements' to Dec 1, to allow time for due diligence and more detailed modelling of returns and costs to be carried out, a Boustead spokesperson said.

The validity of the offer hinged on TT International obtaining approval from the Court of Appeal for a scheme of arrangement to restructure its debts. It received this approval on Tuesday, but not without modifications addressing concerns over the scheme's fairness raised by creditors who appealed against the initial High Court sanction in March.

Boustead said in August that it would buy itself a 60 per cent stake in the special purpose vehicle, Big Box Pte Ltd, which would eventually own and run the warehouse-and-retail complex next to Jurong East MRT station.

TT International would retain the other 40 per cent, and also be master lessee of the 125,000 sq metre, eight-storey building, which could house hypermarts, warehouse space, retail outlets and offices.

TT International, better known for its brand of Akira electronic goods, is largely a trading and distribution company. It put in $95 million to purchase the land from JTC, and the total cost of development for the project is estimated at $247 million.

Construction work of the project's foundation and part of the basement had already begun, but stalled when the company was hit by mounting debts in the 2008 financial crisis and hired nTan Corporate Advisory to restructure its debts.

For the first quarter ended June 30, TT International posted a net loss of $7.53 million. This came as revenue plunged 18 per cent to $110.14 million because its supply chain business was terminated due to a lack of working capital.

In separate announcements to the Singapore Exchange yesterday, Boustead and TT International also said the long-stop date - on which the initial heads of agreement will be terminated if conditions are not met - has also been extended, to April 15, 2011, or any other date the parties mutually agree to in writing.

TT International shares closed half a cent higher at 5.5 cents, while Boustead shares closed flat at $1.05 yesterday.

My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#18
I've attached the Sep 2010 The Edge write-up on Boustead, which I summarized earlier.

Enjoy! Big Grin


Attached Files
.pdf   The Edge Singapore Sep 27, 2010 (Re-orienting Boustead).pdf (Size: 151.17 KB / Downloads: 52)
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#19
(20-10-2010, 02:27 PM)Musicwhiz Wrote: I've attached the Sep 2010 The Edge write-up on Boustead, which I summarized earlier.

Enjoy! Big Grin

nice link, thanks MW. boustead's story looks like it's going to become mroe interesting in the coming days.
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#20
You're most welcome Jon-San!

I've been vested in Boustead since Sep 2006, and year-in year-out the Company has not disappointed with its generous dividend policy.

Now, as it embarks on its growth path to become an Asian MNC, this should be very interesting indeed in the months ahead!

Watch out for its 1H FY 2011 results some time in mid-Nov 2010, where I'd expect the usual 1.5c/share interim dividend to be declared. Smile
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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