(30-10-2014, 09:59 AM)Behappyalways Wrote: [ -> ]For those who are vested or intend to be vested, pay attention to the company's cashflow.
Strange to be borrowing such a high interest rate from convertible bond plus option to convert into shares while bank loan is only RMB23m. Why not borrow more from bank and pay off the convertible. Since you have such a 'popular' and 'killer' product I assume the bank would be most willing to lend out the money.
Watch the cashflow. The company might need the share subscription to help them. If share price falls and the subscription does not go thru, then they might have a problem.
Good point, with the terms of the new deal, and SG's gearing level, I think bank borrowing would be a better option.
Caveat: Sino is not a fraud. That said, from what I gather, anecdotal accounts from various sources does indicate that Garden Fresh is rather popular and well known in Shenzhen.
(30-10-2014, 10:09 AM)Adagio Wrote: [ -> ]Why did the Thai investors take this opportunity to renegotiate downwards the placement price? I find this dishonorable.
Agreed. Not just that, but if they really believe in SG story, they should stick to their 61ct pricing to add confidence to the market.
To be honest I am quite cynical. I think that the banks do not want to lend them.......why? your guess as good as mine......(nice to re-read Eratat's borrowing from SHK)
Their cash level as of 2Q2014 is RMB60m. They need the money to pay off part of the bond plus operating and investing needs....hence they need the proceeds from the new share subscription...The 3Q2014 result is not out and when it is out one can getting a better idea on their cashflow.
(30-10-2014, 10:11 AM)Wildreamz Wrote: [ -> ] (30-10-2014, 09:59 AM)Behappyalways Wrote: [ -> ]For those who are vested or intend to be vested, pay attention to the company's cashflow.
Strange to be borrowing such a high interest rate from convertible bond plus option to convert into shares while bank loan is only RMB23m. Why not borrow more from bank and pay off the convertible. Since you have such a 'popular' and 'killer' product I assume the bank would be most willing to lend out the money.
Watch the cashflow. The company might need the share subscription to help them. If share price falls and the subscription does not go thru, then they might have a problem.
Good point, with the terms of the new deal, and SG's gearing level, I think bank borrowing would be a better option.
Caveat: Sino is not a fraud. That said, from what I gather, anecdotal accounts from various sources does indicate that Garden Fresh is rather popular and well known in Shenzhen.
(30-10-2014, 03:23 AM)value seeker Wrote: [ -> ] (29-10-2014, 11:19 PM)Behappyalways Wrote: [ -> ]not vested
(Sino needs the $$$.....)
The Issue Price of the Placement Shares as set out in clause 2.1 of the Subscription Agreement will be adjusted from S$0.61 for each Placement Share to the following:
(a) S$0.50 per Placement Share; or
(b) the volume weighted average price per Share traded on the SGX-ST on the last market day immediately preceding the date of Completion,
PLACEMENT – SUPPLEMENTAL DEEDS TO SUBSCRIPTION AGREEMENTS
http://infopub.sgx.com/FileOpen/Sino_Gra...eID=320992
The terms are in favour of the new investor. Given the lower share price today, the placement will have a larger dillutive impact. Could Sino Grandness have just walked away?
(Neither vested nor shorted)
Expected change of terms... whether Teochew or not
Has always been the case that the one with higher bargaining power dictates... which is the case AGAINST shortists that can choose the perfect cashflow timing to discredit. If I read correctly the number of placement shares remain the same so EPS dilution is the same as per previous but NTA will be impacted
'As the Issue Price would represent a discount of more than 10% to the VWAP, the Company is required under Rule 811(3) of the SGX-ST Listing Manual (the “Listing Manual”) to seek the specific approval of its shareholders (“Shareholders”) for the issuance of the Placement Shares"
Looks like EGM is required and with lower placement proceed without increasing size to compensate, seems company short term cashflow is not an issue ie no pressure from bondholders as of now. Trading stock now until confirmation of "show me the money" from the Thais before January. EGM will also allow vested parties to ask more questions.
(30-10-2014, 10:09 AM)Adagio Wrote: [ -> ]Why did the Thai investors take this opportunity to renegotiate downwards the placement price? I find this dishonorable.
TTA and PM Group are the prospective investors. TTA is a listed entity, and PM Group is an OEM of Nestle.
It is reasonable to assume that directors of TTA have reviewed Newman9's report and considered the share price slide. They are answerable to TTA shareholders.
The supplemetary agreement may be the outcome of request by TTA Board.
(30-10-2014, 10:19 AM)Behappyalways Wrote: [ -> ]To be honest I am quite cynical. I think that the banks do not want to lend them.......why? your guess as good as mine......(nice to re-read Eratat's borrowing from SHK)
Their cash level as of 2Q2014 is RMB60m. They need the money to pay off part of the bond plus operating and investing needs....hence they need the proceeds from the new share subscription...The 3Q2014 result is not out and when it is out one can getting a better idea on their cashflow.
I understand your point. But I think it is too early to make any conclusions. If their problems are that obvious to the banks, it should be relatively obvious to the bond holders and other stake holders as well. Since their 2 CBs, they did not have the need, at least on paper, to make further bank borrowings; which is, I think, the main reason their gearing is so low.
This share placement, in addition to the cash raised, is also supposed to be a synergistic deal with a strategic investor.
Not familiar with the details of Eratat, but I remembered that the extremely unfavorable terms of their SHK bonds did not tally with their purported cash level. Which was the smoking gun for fraud for all investors here in VB.
Wildreamz
The question is why has Garden Fresh not borrowed from banks to pay off bondholders ahead of marurity.
My understanding is that Garden Fresh cannot purchase the bonds. The decision to redeem rests with bondholder.
(30-10-2014, 11:03 AM)portuser Wrote: [ -> ]Wildreamz
The question is why has Garden Fresh not borrowed from banks to pay off bondholders ahead of marurity.
My understanding is that Garden Fresh cannot purchase the bonds. The decision to redeem rests with bondholder.
Yes, that is my understanding as well. Are there any clause for the CB to allow early repayment? If there isn't, why Sino Grandness was able to pay back 20% of CB1 early?
Sorry, in the middle of work right now, so I am unable to go back and check the details.
Thanks in advance.
That said, while they are unable to repay the CBs completely ahead of maturity, I believe they could repay, at least in part, upon maturity? So supposed their sales are real, they should be able to tide over any cash flow issues etc. with bank borrowings?
sorry, are you guys still vested? :O
gosh, looks like red flag already...
why not play it safe first?
*not vested at all*
(30-10-2014, 11:18 AM)Wildreamz Wrote: [ -> ] (30-10-2014, 11:03 AM)portuser Wrote: [ -> ]Wildreamz
The question is why has Garden Fresh not borrowed from banks to pay off bondholders ahead of marurity.
My understanding is that Garden Fresh cannot purchase the bonds. The decision to redeem rests with bondholder.
Yes, that is my understanding as well. Are there any clause for the CB to allow early repayment? If there isn't, why Sino Grandness was able to pay back 20% of CB1 early?
Sorry, in the middle of work right now, so I am unable to go back and check the details.
Thanks in advance.
That said, while they are unable to repay the CBs completely ahead of maturity, I believe they could repay, at least in part, upon maturity? So supposed their sales are real, they should be able to tide over any cash flow issues etc. with bank borrowings?
2011 bonds matured on 19 Oct 2014, and 19.5% of them were redeemed. The redemption was not early. It is in accordance with schedule.
Holders of 2012 bonds (due Sep 2015) had the rights to redeem early, in Oct 14 together with the 19.5 %. But theey did not.