Hi,
look like the acquisition of China Satellite Mobile Communications Group Limited
is bearing positive results.
2 announcement with 10 days. Confirm orders. Maybe more to come. take note.
It's had been 3 months since the last announcement of major deal.
Seems like things are hitting to a brake.
The only good spot I guess is the recent placement to a dealer in HK. With this connection, BIG boys from HK might come in once a while to drive it up.
I guess it had already run up quite a lot. It's time to let it cool back to 2.7 cents. That's only my estimate. you have the right not to follow.
55% Call option for CHINA SATELLITE MOBILE COMMUNICATIONS GROUP LIMITED ("CSMCG"):
The purchase price payable by Armarda for the 55% Call Option Shares shall be approximately S$104.9 million (HK$645.1million):
1) the issue and allotment by Armarda of 1,280,000,000 Shares (“55% Call Option Consideration Shares”) at the Issue Price (S$0.075)per Share, credited as fully paid, to the Vendors
2) the payment of HK$25 million in cash (the “55% Call Option Cash Consideration”) to the Vendors
3) issuance of loan notes of HK$30 million (“55% Call Option Loan Notes”) to the Vendors
Condition Precedent to the Exercise of the 55% Call Option:
Under the S&P Agreement, the Target Milestone refers to the entering into by CMSCG and/or the Target PRC Subsidiary of such contractual arrangements or obtaining confirmed orders on terms satisfactory to the Company (acting reasonably) with licensed telecommunication provider(s) in the PRC (or such other parties to be agreed upon) for the sale of at least 10,000 units of satellite phones (“Target Milestone”).
The 55% Call Option Long Stop Date was extended to 31 March 2013.
Based on exchange range rate of 1 SGD = 6.147 HKD
Armarda view on 55% call option:
As the 55% call option (which is the right residing with the Company) is contingent upon the completion of certain target milestone events, the Company has no intention to exercise this 55% call option at this juncture.
Recent placement and subscription of total 263,500,000 new shares:
issue price of S$0.0216
PLACEMENT SHARES
147,400,000
SUBSCRIPTION SHARES
116,100,000
Net Proceeds from placement will amount to approximately S$5.3 million (HK$33.56million):
- approximately 20% (S$1,060,000) of the Net Proceeds to finance or fund any acquisitions, purchases or investments that the Group may make or embark upon
- approximately 20% (S$1,060,000) of the Net Proceeds to replenish the Group’s cash and financial resources
- balance of the Net Proceeds (approximately 60%) for the Group’s general corporate and working capital purposes
NTA per share after the Placement and Subscription:
HKD $0.2285 (SGD $0.036)
Based on exchange range rate of 1 SGD = 6.333 HKD
Only 5,000 units of satellite phones has been confirmed out of the 10,000 units of satellite phones, the target milestone is still not meet based on annoucements gathered. Wonder if there is really substantial demand for satellite phones in PRC.
We should get a hint on how good the satellite phones business is. Will armarda let the 55% call option to lapse after 31 March 2013 or will they extend it further?
The issue price of S$0.075 for 1,280,000,000 Shares (terms of 55% call option) is unfavourable to armarda since it current share price is only S$0.032. If armarda will to exercise the 55% call option, they will need S$8.68 million (HK$55million) which their recent placement and subscription net proceeds is not enough. Other than the 55% call option, i do not see any catalyst for now.
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