AP Oil

[secretinvestors]

Heptalink is merely a trader in oil and petrochemicals, and there are many middleman traders in the oil and gas value chain. The value of a trader would usually include product knowledge and trading experience (especially prudence and risk management), plus good contacts with customer/supplier counter-parties and logistics providers in the physical trades domain. If AP Oil is buying 60% with the understanding to bank-roll Heptalink's growing and naturally high-risk oil trading activities, they better have a close handle on what the new company would trade in and the related finances.

I would also add that other than the product knowledge and trading experience, the value may also include the customer network that Heptalink might have built up over the years since it started operations in 2011 and whether AP Oil's products can tap into this existing network. There ain't much information on all these so I guess the proof still lies in the results.

Interestingly, AP Oil also disposed all of its 38.2% interest in one of its associates at a premium to book:
http://infopub.sgx.com/FileOpen/AP%20Oil...eID=327836

A quick calculation should show that there will be more cash idling in the the balance sheet despite the acquisition of Heptalink. Personally, I feel that the management may be good business operators, but probably not as good capital allocators. Hopefully these cash will put into better use and reward shareholders in the long run.