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Business Times, December 14, 2011 
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PST minority shareholder criticises report by IFA
He says it fails to consider factors such as revenue from new ships
By JAMIE LEE
AN institutional investor of Pacific Shipping Trust (PST) - which is being taken private by its holding company - has criticised the financial adviser's analysis of the deal, which has determined that the current takeover offer price as fair.
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PST went on an acquisition blitz last year, acquiring nine vessels for charter that should all be delivered by Q2 of 2013.
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The analysis did not account for the significant boost to revenue from ship acquisitions that were announced a year ago that could, in turn, raise the distribution per unit (DPU), said Stuart Hong, who holds 1.8 per cent of PST through his investment firm Unisysco Holdings.
Mr Hong also told BT that the peer comparison with the two other shipping trusts - Rickmers Maritime and First Ship Lease Trust - was not well executed because the advisers did not fully consider the impact of PST's stronger creditworthiness on its valuation.
In early October, holding company Pacific International Lines proposed to buy up the remaining 40 per cent of PST that it does not own. The shipping firm offered 43 US cents in cash per unit, representing a 14.7 per cent premium over the last-traded price of 37.5 US cents at the point of the announcement.
But the shipping trust - the first to be listed in Singapore in 2006 - went public at 45 US cents per unit.
The shipping trust went on an acquisition blitz last year, acquiring nine vessels for charter that should all be delivered by the second quarter of 2013.
By Mr Hong's estimates, these acquisitions that are tied to charter agreements could double revenue - an issue that was said to have not been considered by the appointed independent financial adviser (IFA), PricewaterhouseCoopers Corporate Finance (PwCCF). Without reviewing any forecasts, PwCCF was said to have reported to the independent directors that the privatisation deal was fair.
'It's about information inequality,' said Mr Hong, who has been investing in the shipping trust since January 2009. Financial forecasting of shipping trusts is easier compared to an operating company under normal circumstances, added Mr Hong.
'One of the main reasons is that your revenues is roughly the daily charter rate times 365. Annual revenues will roughly double, as a result of these acquisitions, and I think that is material.'
PST noted that it would cut its minimum income distribution starting the third quarter of 2009 to 70 per cent from 90 per cent, saying that it wanted to retain cash to fuel future growth.
'So effectively, my money is helping to fund the 2010 acquisitions,' said Mr Hong. 'If the offeror wants to buy my shares, I am entitled to know what PST bought with my money. By that, I need to see the P& L forecasts for the acquisitions.'
Turning to the peer comparison - a common practice by financial advisers - Mr Hong claimed that the poorer creditworthiness of PST's peers was not reflected. For example, First Ship, which has a S& P's rating of BB- for its long-term debt, was negotiating to secure a significant loan facility at the time that the PwCCF report was released - a point that was said to have not been raised in the report.
It was only a few days later that First Ship said that it had secured a term loan of US$479.6 million that came with a 'substantially higher' interest margin than its last loan facility.
In response to queries, PST said that these concerns can be addressed by the IFA at this Friday's extraordinary general meeting, which will be held for unitholders to vote on the deal. PST units closed unchanged at 42 US cents yesterday.
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Market where got fair one?
U still dreaming ah?
Sorry to wake U up, sorry.....melgo5 ( Date: 21-Nov-2011 20:41) Posted:
Does Sgx have the right to check whether a delisting offer is or not fair to the shareholders? Its really big fish eat small fish.
Laulan ( Date: 21-Nov-2011 10:29) Posted:
People like us don't have the power to make an issue out of it. Look at Robinsons, CKTang, Corts Sp, SPC, Furama, C& O Pharm, Passion, etc, etc (Countless numbers) in sgx. They were taken off the listing voluntarily during poor market sentiments. Now I fear more to be taken off, as you said to benefit the directors who scheme for this to make multimillion dollars from the exercise.
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Does Sgx have the right to check whether a delisting offer is or not fair to the shareholders? Its really big fish eat small fish.
Laulan ( Date: 21-Nov-2011 10:29) Posted:
People like us don't have the power to make an issue out of it. Look at Robinsons, CKTang, Corts Sp, SPC, Furama, C& O Pharm, Passion, etc, etc (Countless numbers) in sgx. They were taken off the listing voluntarily during poor market sentiments. Now I fear more to be taken off, as you said to benefit the directors who scheme for this to make multimillion dollars from the exercise.
baberic ( Date: 19-Nov-2011 20:24) Posted:
| I think using average traded prices to fix a cash back to delist a counter can sometimes tantamount to short-changing the public investors who are not protected by scams. I am not saying that PST's offer fit as a scam to wit, but many company directors can willfully allow their counter played down to subsequently offer a delist in exchange for a peanut price, and with it make millions of dollars from the silent majority of minority shareholders. Sad to know of many cases happening in the singpapore market. |
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People like us don't have the power to make an issue out of it. Look at Robinsons, CKTang, Corts Sp, SPC, Furama, C& O Pharm, Passion, etc, etc (Countless numbers) in sgx. They were taken off the listing voluntarily during poor market sentiments. Now I fear more to be taken off, as you said to benefit the directors who scheme for this to make multimillion dollars from the exercise.
baberic ( Date: 19-Nov-2011 20:24) Posted:
I think using average traded prices to fix a cash back to delist a counter can sometimes tantamount to short-changing the public investors who are not protected by scams. I am not saying that PST's offer fit as a scam to wit, but many company directors can willfully allow their counter played down to subsequently offer a delist in exchange for a peanut price, and with it make millions of dollars from the silent majority of minority shareholders. Sad to know of many cases happening in the singpapore market.
katak88 ( Date: 17-Nov-2011 23:54) Posted:
Business Times - 17 Nov 2011
Pacific Shipping Trust receives in-principle approval to delist
By CARINE LEE
Pacific Shipping Trust on Thursday announced that it has received in-principle approval for its proposed delisting from the Singapore Exchange.
Trustee-manager PST Management Pte Ltd had in October announced its intention to privatise PST at an exit offer price of US$0.43. The offer represents a premium of approximately 15 per cent over the last transacted price per unit of US$0.375.
Under the proposed voluntary delisting, the minimum acceptance condition is for PIL to hold a stake of at least 75 per cent in the trust.
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I think using average traded prices to fix a cash back to delist a counter can sometimes tantamount to short-changing the public investors who are not protected by scams. I am not saying that PST's offer fit as a scam to wit, but many company directors can willfully allow their counter played down to subsequently offer a delist in exchange for a peanut price, and with it make millions of dollars from the silent majority of minority shareholders. Sad to know of many cases happening in the singpapore market.
katak88 ( Date: 17-Nov-2011 23:54) Posted:
Business Times - 17 Nov 2011
Pacific Shipping Trust receives in-principle approval to delist
By CARINE LEE
Pacific Shipping Trust on Thursday announced that it has received in-principle approval for its proposed delisting from the Singapore Exchange.
Trustee-manager PST Management Pte Ltd had in October announced its intention to privatise PST at an exit offer price of US$0.43. The offer represents a premium of approximately 15 per cent over the last transacted price per unit of US$0.375.
Under the proposed voluntary delisting, the minimum acceptance condition is for PIL to hold a stake of at least 75 per cent in the trust.
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Business Times - 17 Nov 2011
Pacific Shipping Trust receives in-principle approval to delist
By CARINE LEE
Pacific Shipping Trust on Thursday announced that it has received in-principle approval for its proposed delisting from the Singapore Exchange.
Trustee-manager PST Management Pte Ltd had in October announced its intention to privatise PST at an exit offer price of US$0.43. The offer represents a premium of approximately 15 per cent over the last transacted price per unit of US$0.375.
Under the proposed voluntary delisting, the minimum acceptance condition is for PIL to hold a stake of at least 75 per cent in the trust.
This quarter dividend also deducted from offer price.
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Hulumas ( Date: 05-Oct-2011 18:52) Posted:
Lack of liquidity in SGX market ?
pharoah88 ( Date: 05-Oct-2011 09:23) Posted:
Pacific Shipping Trust has announced its voluntary delisting from the SGX. Exit offer is for US$0.43 per Unit in cash that is a price, which exceeds the highest transacted price of the Units in the last three years and a premium of approximately 15% over the last transacted price of US$0.375 per Unit.
The Exit Offer will provide an exit option for those Unitholders who wish to realise their investment in the Units but find it difficult to do so due to the low trading liquidity of the Units. |
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Lack of liquidity in SGX market ?
pharoah88 ( Date: 05-Oct-2011 09:23) Posted:
Pacific Shipping Trust has announced its voluntary delisting from the SGX. Exit offer is for US$0.43 per Unit in cash that is a price, which exceeds the highest transacted price of the Units in the last three years and a premium of approximately 15% over the last transacted price of US$0.375 per Unit.
The Exit Offer will provide an exit option for those Unitholders who wish to realise their investment in the Units but find it difficult to do so due to the low trading liquidity of the Units. |
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Pacific Shipping Trust has announced its voluntary delisting from the SGX. Exit offer is for US$0.43 per Unit in cash that is a price, which exceeds the highest transacted price of the Units in the last three years and a premium of approximately 15% over the last transacted price of US$0.375 per Unit.
The Exit Offer will provide an exit option for those Unitholders who wish to realise their investment in the Units but find it difficult to do so due to the low trading liquidity of the Units.
October 4, 2011, 6.01 pm (Singapore time)
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Pacific Shipping Trust seeks delisting, exit offer at 43 US cts/shr
By JOYCE HOOI
Pacific International Lines (PIL) is trying to delist Pacific Shipping Trust (PST) and take it private.
PIL, the trust's holding company, is offering 43 US cents in cash for every share in the trust that it does not already own.
The offer price is a 14.7 per cent premium to its last-traded price.
Against the volume-weighted average for the six-month period before it last traded, the offer price stands at a premium of 21 per cent.
The trust cited the need for greater operating flexibility, the compliance costs of maintaining the listing and the trust's low trading liquidity as reasons for the decision for delisting.
The unit had been suspended prior to the announcement being made. |
