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Safe play
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thunderdoor
Senior |
02-Jan-2013 20:23
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My sleeper stock got a massive awakening today, breaking the 0.01 resistance and hitting a high of 0.012. Any news or rumors to justify this jolt? |
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papayaface
Member |
06-Oct-2012 22:31
Yells: "This is the best time to enter....when everythings uncertain" |
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Honestly, i feel this is the best time to enter/start accumulating ......... when things are blurry and uncertain. High risk high returns. Dont think the company will fold up. Wait for more RTO proposals in the pipeline. Huat ah. |
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Sgshares
Elite |
06-Oct-2012 21:50
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Ban Joo’s troubled transformation from textile to satellite broadband enters its sixth year 3/10/2012 – Reverse take-overs are supposed to give public companies a new lease of life, when their old business is no longer viable and the listed entity can be used by another company to raise funds from investors. One notable example in recent years was Easy Health Asia Pacific, which was bought over by the Kuok family in a reverse takeover and is these days a Straits Times constituent under the name Wilmar International. But no such luck for Next-Generation Satellite Communications (NextGen), formerly known as Ban Joo & Company. The textile trading company started in Malaysia in 1954, and moved to Singapore in 1959, converting from a partnership to a Singapore-incorporated company in March 1964. In the last five years, it has tried its hand at online gaming through Diamond Sky International, a submarine cable linking Hong Kong and Indonesia through Telemedia Pacific Group, satellite broadband through China Satellite and Broadcast Company, and most recently it inked a deal to buy into Scientific Discovery Development (SDD), which uses satellite communications for disaster back-up for financial services companies. Five years on, and it's not yet a Wilmar International. Far from it. The release of its financial statements has been delayed possibly until November 30, pending the auditor finalising its work. The reason: around S$22 mln of its cash appears to have been locked up with a Hong Kong finance company. The acquisition of SDD is hanging in the balance. And investors are asking whether the latest attempts at building a successful business to replace its long-disposed textile operations will finally succeed. Enter Telemedia Pacific Group The identity crisis started for Ban Joo in 2008, when it was included in the SGX's watchlist for making losses for three years. They amounted to more than S$60 mln, and debt of about S$64 mln accumulated. After more than fifty years in the textile business, Ban Joo’s family management concluded that margins were too thin to return to profitability. After an abortive attempt to get into online gaming with Diamond Sky International, Telemedia Pacific Group came on the scene. Its ultimate controlling shareholder was Mr Hady Hartanto, with Mr Hardi Koesnadi holding the second largest stake through Rariro International Enterprise (HK) Ltd. Telemedia Pacific Group took control of Ban Joo by paying S$23 mln for a 51% stake through a warrant issue in August 2008, and renamed it Next-Generation Satellite Communications. In turn, Telemedia Pacific Inc and Telemedia Pacific Incorporation were injected into the company in September 2009. The aim was to build a fibre optic broadband cable from Hong Kong to Indonesia. NEC was the desired contractor. The purchase price of S$376.15 mln was settled by issuing 3.58 bln shares. Hady Hartanto was appointed as the executive director and later as Executive Deputy Chairman of Ban Joo. Among his professional qualifications was listed a directorship of Niaga Finance Co Ltd, a Hong Kong-based finance company which has grown in significance for NextGen. More on that later. Joining Hartanto was Telemedia Pacific Group's other major shareholder Hardi Koesnadi. He later became Executive Director at NextGen. Hartanto, in an announcement signed by himself, awarded himself, his sister Sri Tjintawati Hartanto (described in the announcement as an " associate" ) and Koesnadi with performance shares because the number of board meetings they attended had " far exceeded that normally convened by other listed companies" . That was October 2010. But things started to turn sour. A year later, the Singapore Exchange said " Hady Hartanto [had] not demonstrated the qualities expected of directors and management of SGX-listed companies as required under Catalist Rules 406(3)(b) and 720" . This was because he and others had failed to disclose information about terminated contracts of about S$12 mln at Scorpio East Holdings, where he was also a director. China Satellite and Broadcast Company comes on board Two months later, a new CEO was appointed: Li Jian Min, who founded and was the sole director of China Satellite and Broadcast Company Ltd. This signalled another new direction for the company formerly known as Ban Joo. The other shareholder of Telemedia Pacific Group Hardi Koesnadi liquidated his entire holdings in NextGen through Rariro International Enterprise (HK) Limited, although he continued as a director of the company. New acquisitions were in NextGen's sights. Acquisition of Scientific Discovery Development On 30 May 2012, NextGen proposed to buy 51% in Scientific Discovery Development (SDD) from Mr Wu Weichun for RMB51 mln. SDD owns Beijing Satbit Information Technology Co. Ltd, a satellite-based telecommunication service provider in China which holds a so-called Very Small Aperture Terminal (VSAT) licence issued by the Ministry of Industry and Information Technology. Beijing Satbit offers its services to the security and finance sectors, as well as for system integration and agricultural information. NextGen would own only the security and finance business, while other two divisions to be retained by Mr Wu Weichun. The sales price was also of interest, representing 5.6 times of EBITDA of unaudited FY10 and FY11 proforma financial statements. Wu (the vendor) and the registered shareholders of Beijing Satbit (warrantors) guaranteed a minimum EBITDA of RM17 mln per year for five years starting 2012. In case EBITDA falls below the guaranteed amount for any year the difference shall be paid by Wu. If EBITDA exceeds its targets, Wu would receive 20% of the upside. Sounds fair. But based on a purchase price of 5.6 times FY10 EBITDA, earnings were roughly RMB 9 mln. So, the guaranteed EBITDA commitment was almost double historical EBITDA.  1. If Mr Wu Weichun is so optimistic on the prospects of Beijing Satbit, why did he decide to sell a 51% stake?Separately, Wu Weichun has granted a call option to CUH for the remaining stake in Beijing Satbit, exercisable during the three years after completion of the acquisition. The group was to finance the acquisition through internal funds. Where is the cash? Then came the bombshell. On July 5, 2012, NextGen announced that funds placed with an unnamed finance company in Hong Kong could not be withdrawn. NextGen thought it had a cash balance of S$26.8 mln with the finance company. While S$4.2 mln was restricted to satisfy letters of credit, it should still have had S$22.6 mln at its disposal. But the finance company said a miserly S$21,000 was available for withdrawal, with the remaining funds restricted. NextGen and its lawyers paid the finance company a visit and, within the week, established that the finance company did not have enough money to make immediate payment, as the funds were fully loaned to its customers. By the beginning of August, only S$1.25 mln had been paid, with a repayment schedule still not worked out. 2. Will the acquisition of 51% of Scientific Discovery Development S.A. go ahead?NextGen was seeking an extension from Mr Wu for settling the RMB51 mln purchase price for SDD. Hady Hartanto again NextGen didn't disclose the identity of the Hong Kong finance company that has its cash. But we can make a guess. 3. Is Niaga Finance Co Ltd the Hong Kong finance company in question?A filing by NextGen on July 11, 2012 revealed that its former Executive Director and substantial shareholder Hady Hartanto owned 19% of the finance company's holding company. Moreover, said NextGen, Hartanto had been borrowing money from the finance company. For example, page 38 of the most recent available report for 2010 shows he had borrowed a total of HK$36.2 mln, or about S$5.7 mln, due within one year. So, there appears to be a match. But many questions remain: 4.
Why did the finance company of which Hartanto is a director and
substantial shareholder initially make it so difficult for NextGen to
get its money back? 5. Was NextGen's money used as a guarantee for Hartanto's loans from Niaga Finance, and was therefore genuinely encumbered?NextGen saw the need to highlight on July 15 that Hartanto had not been a director since November 2011. 6.
And if, as the finance company claimed, the cash was restricted, then
why is it now paying out the money as and when it receives repayments
from its customers?We can only guess. Ernst & Young has been appointed to investigate. 7. Will the Ernst & Young report - once completed - be made public?With all of this going on, NextGen is still trying to get on with business. Mid-August, it announced a joint venture in Wuxi in satellite broadband services. 8. Why is China Satellite Broadcast no longer buying Telemedia Pacific Group's stake in NextGen?Lin Jian Min is still CEO of NextGen, but his company China Satellite and Broadcast's plan in March to buy Telemedia Pacific Group's 1.8 bln shares was cancelled at the end of August without a reason given. 9. Will Li Jian Min quit as CEO after his China Satellite and Broadcast decided not to buy Telemedia Pacific Group's stake?We can only wonder whether Mr Lin will also leave at some point, and the revolving door at NextGen will continue. 10. Who will Telemedia Pacific Group sell its shares in NextGen to now?Perhaps Ban Joo should have stayed in the textile business. |
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ykjuay
Senior |
05-Jul-2012 16:43
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Early fall after trading halt was caused by some financial flow limitation within company & HK new regulations, it is no an issue, price will gradually edge up...potential projects still in hand under negotiation...worth a punt |
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