25-08-2014, 11:35 PM
Dear d.o.g
You are so right about this company.
Now, it is a half-zombie.
http://chinaessence.listedcompany.com/financials.html
The assets under PPP have all been "written off". The worst thing is IDs and management in the company are still receiving their salary while the company is almost dormant.
This is indeed one more strong reasons to avoid S-chips...
You are so right about this company.
Now, it is a half-zombie.
http://chinaessence.listedcompany.com/financials.html
The assets under PPP have all been "written off". The worst thing is IDs and management in the company are still receiving their salary while the company is almost dormant.
This is indeed one more strong reasons to avoid S-chips...
(21-12-2011, 11:00 AM)d.o.g. Wrote: [ -> ]potatolover Wrote:So the CB is just behaving like a bond, with fixed repayment schedules. The upside potential from share price appreciation is tantalising but simply out of reach.
In this case it is much worse than a normal bond because there is an asset/liability domicile mismatch. The assets are in China, the liability is in the Cayman Islands. That's probably one of the key reasons the bondholders agreed to restructure - because there was no realistic way they could get their money back, nor take over the company.
All they can hope for is either a Ponzi-refinance i.e. a new group of banks/bondholders is dumb enough to lend the company new money so they can get paid, or the stock market goes crazy and they manage to either sell off the CBs or convert the CBs and sell the shares.
This kind of domicile mismatch is extremely common among S-chips as the company is usually incorporated in the Cayman Islands, BVI, Bermuda etc. Of course, few investors think about this until there are signs of trouble, at which point it is often too late.