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Guggenheim investment is preferred + warrants. i.e equity investment. Invested in 2010 at the bottom of US economy. Will be surprised if it is still worth only US$100m.


Sent from my iPhone using Tapatalk
http://mobile.bloomberg.com/news/2014-11...stake.html


Haitong Will Invest in $697 Million Fund Managed by TPG

Haitong (665) International Securities Group Ltd. agreed to invest in a HK$5.4 billion ($697 million) fund that will be managed by TPG Capital and owns a minority stake in a Chinese car dealer.

A Haitong unit agreed to spend HK$2.1 billion for a 38.9 percent stake in the fund, which owns part of China Grand Automotive Services Co., according to a Hong Kong exchange filing yesterday. The rest will be held by an investor not connected to the company.

The deal will enable TPG, the U.S. private-equity fund co-founded by billionaire David Bonderman, to exit from a stake of about one-third in the Shanghai-based car dealer, a person with knowledge of the matter said. Selling will help TPG boost returns to about three times the money invested in an Asia fund, the person said, asking not to be identified because the details aren’t public.

Siobhan Xiaohui Zheng, a Hong Kong spokeswoman at Brunswick Group representing TPG, declined to comment beyond the announcement.

TPG sought a buyer for the stake after China Grand Automotive scrapped plans for a Hong Kong initial public offering twice since 2010, the person said.

Hedging Deal
Haitong International New Energy II Ltd., the unit investing in the fund, has entered into a hedging arrangement that will end in 2017, the filing by its parent said. Under the deal, Haitong puts up HK$1.48 billion of the purchase price and HK$620 million comes from a Hong Kong company called Huge Group Holdings Ltd. Huge will also make interest payments to Haitong of 9.9 percent a year on HK$1.48 billion.

In 2017, if the value of the 38.9 percent stake is more than HK$2.1 billion, Haitong will be required to pay the excess and also return the initial HK$620 million to Huge, according to the statement. Should the value fall below HK$2.1 billion, Huge will pay as much as HK$1.48 billion to Haitong.

The investment is “low risk” and “high returns,” Haitong said, describing China Grand Automotive as well-established. The company is one of the three biggest auto dealership networks in China, TPG said on its website.

China Grand Automotive had planned to seek about $1 billion in an IPO, people with knowledge of the sale said in April 2010. It considered selling a 15 percent stake for about $700 million earlier this year, and had received approval from the Hong Kong stock exchange, people with knowledge of that plan said in June.

China’s passenger and commercial vehicle sales will probably reach 23 million units this year, Dong Yang, secretary general of the state-backed China Association of Automobile Manufacturers, said in October. In July, the group projected an increase of 23.83 million units.
One down - 2 more to go!

Below from Goh Han Peng of OSK-DMG

*************************

TPG Capital has agreed to sell its 38.9% stake in China Grand Automotive Services (CGA), the largest auto dealer by sales in China, to a consortium of buyers led by Haitong Securities, for nearly USD700m. CGA is one of k1’s portfolio investments. It invested USD12.4m in a TPG-led fund that holds CGA some seven years ago, and is getting back pre-tax proceeds of USD28m from the latest sale. While the returns are decent, it falls short of our earlier expectation due to a general derating
across the Chinese automotive sector as sales slowed this year. Still, the divestment will mean the potential for further cash distributions. K1 divested its U.S. railcar equipment business last year, and has distributed SGD162m (7.5 cents/share) in dividends since. After the latest sale, its remaining investments include a 10.2% stake in Knowledge Universe Holdings (KUH) and a USD100m investment in preferred shares of Guggenheim Capital with a 7% coupon rate and a conversion option. Management does not plan to make any further investments and will manage the existing portfolio for eventual exits. Using a sum of parts valuation, we value the stock at SGD0.24/share after reducing our numbers for CGA. We pegged a 10% discount to derive a TP of SGD0.22. We maintain Buy on the stock
Ya. CAG divestment was a disappointment.
Potential 5 cts/share became 1.5cts/share.....very disappointed....winter coming for k1....
BRIEF-K1 Ventures updates on divestment of interest in China automobile business
29 Dec 2014 19:04
Dec 29 (Reuters) - K1 Ventures Ltd KMAR.SI :
* Divestment of interest in China automobile business
* Says company will receive approximately US$32 million in cash
* Says following the completion of the sale, the company has ceased to have any
interest in China grand auto
* Sale is expected to increase earnings per share by approximately 1 cent for the financial year ending 30 June 2015

http://infopub.sgx.com/FileOpen/China%20...eID=329796

AH well, lets just accept it, its a good way to end off 2014 for K1 SHolders i reckon.. Just accept that and move onz..
(01-12-2014, 11:09 PM)desmondxyz Wrote: [ -> ]Potential 5 cts/share became 1.5cts/share.....very disappointed....winter coming for k1....

1.92 cents la.

with leftover from Helm, next year total div about 3 to 3.5 cents per share. May have to do a capital reduction to pay out the cash coz not enough dividends.

after that, it is KU and GG left.
may be a good thing that CAG is divested.

國策解碼:深圳突限購有玄機

■內地恐掀起一輪汽車限購潮,對長汽、廣汽及東風影響負面。 資料圖片
深圳市在本周一晚上突然宣佈限購汽車,一反之前多次不會實施限購的承諾,舉國譁然。深圳市政府不惜自毀形象和公信力,以突襲方式實施,有內地分析指,是受壓於昨日開始生效的新《環保法》,和正在修訂的《立法法》。由於全國所有城市都面臨同樣壓力,如果深圳今次可以過關,勢將引發其他二、三線城市仿效。在今年3月人大會議前,內地恐掀起一輪汽車限購潮,對長汽(2333)、廣汽(2238)、東風(489)汽車股影響負面。


內地新《環保法》歷經多年修訂,今年開始生效,被稱為「史上最嚴格」。除加大對違軌企業處罰外,亦增加地方政府在治理「PM2.5」等空氣污染問題的責任,減排任務越來越重。


另一方面,全國人大常委會已審議了《立法法》修正案草案,其中提出,地方政府規章不得設定減損公民、法人和其他組織權利或增加其義務的規範。新華社稱,這意味地方政府不能任意推出一些限購、限貸等地方限制性行政手段。


深圳市政府過往多次強調,會以經濟手段,而非行政手段,處理汽車過多問題。但在減排壓力增加下,解決時間已經無多。如果《立法法》修正案通過,等於「封後門」,所以有必要在草案通過前,搶閘推出汽車限購令。深圳做法對其他城市有示範作用,令限購範圍有可能擴大。

記者︰黃尹華
Indeed, I came across this related article on Christmas Day and thought of sharing it with VB members. The WSJ article is not entirely new, but seeks to highlight China slow shift (gaining some traction) towards quality growth rather than going for (double digit) quantity.

The sale of CGA is therefore, not a horror show after all : P Always better we count the eggs in our hands than the birds in the bushes.

http://www.wsj.com/articles/inventories-...1419408159
The Board of Directors is pleased to declare a tax exempt one-tier interim dividend of 1.5 cents per share (2014: nil). The dividend will be paid to shareholders on 12 February 2015.

Notice is hereby given that, the Share Transfer Books and Register of Members of the Company will be closed on 2 February 2015 at 5.00 p.m. for the preparation of dividend warrants. Duly completed transfers in respect of ordinary shares in the capital of the Company (“Shares”) received by the
Company’s Registrar, B.A.C.S. Private Limited, at 63 Cantonment Road, Singapore 089758 up to 5.00 p.m. on 2 February 2015 will be registered to determine shareholders’ entitlement to the proposed interim dividend.

http://www.k1ventures.com/admin/files/k1...s%202Q.pdf
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