Metro Holdings

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just in time for a good bonus for Jopie Ong again.
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Tomorrow should see possitive reaction .
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http://info.sgx.com/webcoranncatth.nsf/V...200425705/$file/divestmentmetrocitybeijing.pdf?openelement

Based on the above BMC sale announcement
Just a short summary:
Total Number of Shares ('000) 828,585.87
Sale proceed from Sale ('000) $132,000.00
Sale proceed per shares $0.1593
Net Gain ('000) $87,400.00
Gain per share ('000) $0.1055

As per 3Q 2012 Result:
Net Cash ('000) $286,492.65
Net Cash per shares $0.3458

So after the sale, the total net cash should be at (15.93 + 34.58) cents = 50.51 cents

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don't be naive. gain should also provide for Jopie Ong's coming fat bonus first.
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In 2005 when Metro sold Ngee Ann City JO collected 16 million bonus
In 2007 when they sold a Shopping mall in Penang JO collected 7 million.
And all these years he been collecting fat bonuses, this is a norm....dun be naive hoping they will distribute their gain to shareholders.... at most if u are lucky enough they give you a 5% dividend.

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I dun mind paying Jopie his big bonus for shipping out the biggest white elephant in Metro's portfolio. In China, once occupancy in Malls stagnant or worst start to fall, something is really wrong. In this case, it is widely reported that Metro City BJ has no more leading manager of the mall and hence apart from the few anchor tenants, it is like a ghost town.

I think Jopie should be very relief that the sale went through as it was sold at a huge premium in a very tight credit environment with authorities staring at such sensitive transactions.

Next step - fundamentals post sale:

Net liquid assets + Long Term Investments: $0.617/share of which net cash stands at $0.40/share.
Investment Prop: $0.686/share
Total NTA post sale: $1.303.
Current share price:$0.70

Its deep value but share price will continued to be dogged by historical perception that Jopie keeps fat bonuses for himself and share very little with shareholders. As Metro has not been doing much of late - mainly due to cautiousness in key markets amidst tight credit regime, any capital management plans will help to narrow the glaring gap between discount in share price to NTA.

2 more months to final results and we shall see if a leopard will change its spots. Never say never.
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JO is a good entertainer, he entertained the Bristish and got OSDPL with few million $ and turned it into a 500 millions sales to a German fund.
Believe he has done another magic on this Metro Beijing deal also.
JO is a good deal maker , he knows how to entertain .
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What does Jopie Ong, Edwin Lee and Putra Masagong share in common?

They are all ex ACS Boys. Both Jopie and Putra are Indonesians.

Face could well be an important issue to consider especially when these bosses reach their prime of their career.

A strong share price will be a common topic when alumni gathers. In China, face issue is also very important in meeting clients and potentially closing deal.

With the latest closure, financial health at Metro is at the strongest in its corporate history. There is also a buy-out option by the Ong family and Ngee Ann that can never be ruled out.
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what's next in line to sell or buy?

EC Mall? quite matured already. 99+% occupancy rate.
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In addition to the last minute closure of sales of Metro City BJ, its known listed investments in HKSE also performed well during the quarter:

i) Topspring (3688)- 50m shares ended at HK$4.00 vs HK$3.30 as of 30 Dec 11

ii) Shui On Land (272) - ended at HK$3.14 vs HK$2.36.

There should be handsome writebacks but dunno if that would positively impact bonus payments to Jopie Ong and other directors.

Given that Metro has slowed sizable China developments after EC Mall, it will be difficult to see where substantial gains from China asset sales could be coming from in the light of prevailing hawkish and tight credit environment towards real asset investments.

Note that Metro City BJ has a state owned partner and there could possibly be other reasons behind the closure of the sales process given the dismal operating conditions of the mall for prolong period of time since opening.
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