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IPTs are the lingering concern among investors of the company. Will the move trigger a re-rating? Probably has to wait till the disclosure of prices to pay

Silverlake Axis mulls acquisition of executive chairman's stakes in various private entities

Following the disposal of GIT's shares, Silverlake has again announced a 1 cent special dividend to reward shareholders.

Interestingly, the capital control in China seems to be delaying the company's ability to make cross border cash transactions. I think in FY18, it is likely all of the few hundred mil proceeds will be successfully taken out from China. This may mean one more round of 1 cent special dividend and possibly the acquisition of the Chairman's companies to expand Silverlake's products.

However, it also seems Silverlake's business has generated about 45% less in operating cash flow before working capital changes and this may be a cause of concern. No doubt, Silverlake should be able to sustain another 3 cents dividend next FY, but for the FY after, there may be a reduction if cash flow does not improve. To stem this problems, Silverlake should also consider start paring down its loans (clear it all)

<Not vested>

1)Have anyone wondered why with 720 million cash hoard, Silverlake would still want to acquire the 3 private entities of Mr Goh with share issuance?
Combined, they only cost 156 million + an additional earnout consideration bonus.

2) Would Mr Goh give out a BIG dividends after diluting the shares or before diluting the shares?

3)Why is HNA disposing shares of silverlake recently?

Any thoughts?
Previously there was an inquiry to Silverlake about the cash proceeds earned from its China sale. Silverlake mentioned they are withdrawing the amount but are subjected to the capital control limits imposed by China. The balance sheet and cashflow statement of Silverlake of the past 3 quarters seems to corroborate with the statement made.

The sale of Silverlake stake by HNA may be simply down to profit taking or that since Silverlake is paring down stake on its China associate, HNA group is doing likewise to the Singapore listed Silverlake.

<no Longer Vested>
Thanks CY09,

So i would guess that they MAY have wanted to buy by cash (positive thinking) but due to China restriction, they are unable to do so.
Unlike previously where they keep issuing shares for GPO's private entities as per Razor99's report.
Silverlake Axis is buying shares in the private entities by issuing new shares at $0.71. Why would Goh Peng Ooi accept new shares at $0.71 which is much higher than the market price?

I noticed the NTA after the acquisition would become negative. This is very unusual and seems to make Silverlake Axis worse off.

While the shares being issued at $0.71 for the acquisition seems to be positive, I have no idea why the NTA would deteriorate so much.

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Noticed that little has been covered of Silverlake for a long time.

Here's something I have noticed as of 2Q- Revenue flat, but increasing % of recurring revenue is now in Maintenance and Enhancements. Silverlake Recurring revenue has grown from 55% in proportion of total revenue to now of 72%

Lower Profits - Silverlake reported lower net profit because of the loss in other gains and incurring higher taxes with the loss in Pioneer status in Malaysia, otherwise net profits is relatively flat compared year on year. But things have changed so extrapolating its net profits, it is estimated that Silverlake will earn about 2.4 SG cents per share. And assuming a 50% dividend payout ratio (they usually pay 60%), it seems Silverlake offers some value at 24 cents

And as covered previously, one of the moat is that it is in the business of core banking software which banks take very long to replace. With software maintenance forming a big part of revenue, it seems Silverlake's clients have stuck to the company's products

Why did non-current loans and borrowings increased to RM$125 million as at 31 Dec 2019?
Half of the increase was because the company borrowed more money from their revolving credit facility.

Half of the increase was due to the adoption of the new accounting rule. This increased lease liabilities which is classified under loans and borrowings
What is the purpose of this revolving credit facility for their business?
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