Boustead Singapore

[valuestalker]

Just my 0.02.

The Negative:
Boustead is essentially providing liquidities/funds to OMH to kickstart Sarawak smelting plant. The OMH placement itself is most probably due to:
1. OMH's failure to raise fund from HK exchange and its inability to secure fund from banks and other sources because of the economic uncertainties due to European debt woo.
2. OMH reported loss for year 2011 due to the plunged in ore and manganese prices.

The Positive:
I would say that the acquisition is not so much in owning OMH but more to buy the future opportunities in working with OMH:
1. Future synergies between Boustead and OMH as quoted from OMH chairman “'In time, we will look into jointly investing in more energy-related industries, with Boustead as the builder and OMH a consumer of energy.'”
2. Rationale provided by company: “it will provide opportunities for the Boustead Group to deploy its project management and engineering expertise, including power plant, water treatment plant, furnaces and process control expertise, to a new industry. Once established, the Directors hope to see a flow of more opportunities in the development of natural resources across the whole of Asia, plus Australia.”