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CC Low wrote: The idea of "passive" minority shareholders getting together to give the management a wake up call is commendable. While its previous compatriots in the industry have been very active in adding value to the share price of their counters for the benefit of their shareholders, Sing Holdings has been sitting on the "laurel" of its crown and maintaining status quo, much to the displeasure of minority shareholders. They have watched Heeton, Hiap Hoe, and Roxy-Pacific grew from strength to strength over the past 5 years and distancing themselves further from Sing Holdings which remains in the "doldrums".
In the "draft" letter it was proposed that a higher dividend payout be made from income receivable from "The Laurels". There are 2 things to note, viz.:
(1) All the income (i.e. Sing Holdings' share of the project sales) has already been fully realised into its P&L since Sep 2013. The only income yet to be realised is from its share of project sales in the Waterwoods EC project (about 42 % sold amounting to $157m). However, this can only be recognised as income upon issuance of vacant possession after TOP is obtained (possibly in 2015). Sales for the development at Robin Road (Robin Residences) would only be launched in mid 2014 although construction works have already commenced in second quarter of 2013.
(2) Dividend of 1 cent (final dividend - tax exempt) and 0.5 cent (special dividend - tax exempt) have already been proposed for FY 2013.
As to the idea of using available funds to do share buy back (treasury shares), it may not necessarily be a good financial proposal. It all depends on the liquidity and cash situation of each individual company. Sing Holdings is not in a net cash position, and with a heavy burden of bank debts, such an exercise may not be appropriate since it has only a small cash float (vis-a-vis the aggregate bank debt).
One way of adding value for shareholders is to issue a warrant exercise at, say 1 for 2, at a very nominal price ( 1 or 2 cents per warrant) with conversion at 50 % of the price of its mother share. That way the benefits would be "win win" for both the group as well as shareholders. The group would receive funds from the warrant exercise as well as from the conversion at a later date, which would provide it with additional funds without the need for further drawdown on bank facilities ; and shareholders would have immediate benefit because the price of its warrant would have risen to half of the value of its mother share.
Just my two cents worth.
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