U.S. blacklist puts reverse takeover of Aussino in doubt.
Friday, 22 June 2012 16:26
A planned $60 million reverse takeover of Singapore bed linen maker Aussino Group may not materialise as the firm planning to inject assets into Aussino is linked to a Myanmar businessman on a U.S. blacklist.
While Singapore does not impose sanctions on Myanmar, bankers and lawyers Reuters spoke to said authorities were unlikely to let a firm list in the city-state if there are question marks about the owners and managers.
âBankers are supposed to do due diligence to ensure integrity of management. Appearing on a U.S. watch list wonât do,â said one of the bankers, who declined to be named because of the sensitivity of the issue.
Aussino shares have risen about 70% since it said on Monday it had signed a non-binding memorandum of understanding whereby it will issue new shares to buy a firm called Max Strategic Investments which will operate petrol kiosks in Myanmar.
The Max Myanmar group, headed by Myanmar businessman Zaw Zaw, will gain majority control of Aussino as a result of the transaction.
Mr Ong Ah Whatt is richer suddenly. He subscribed for 36 m shares in May2012 at 3.474 cents. Sold 22 million shares in July --- probably around 14 cents.!!!!
Who is Ong Ah Whatt? Anyone has info?
S$2.3 million richer in real cash in just 2-3 months!
Still got another 14 million shares worth x 14 cents -= $1.9 million.
Aussino Group founder and chairman Anthony Lim has sold 32.4mil shares in the open market. In July, Aussino announced the proposed acquisition of Max Strategic Investments in a reverse takeover.
Under the deal, Mr Lim will buy back Aussinoâs business for $9.4mil. The above exercise is to raise money for buying back his business.
I did a back of the envelope estimate and concluded that Aussino is too overvalued at 14 cents currently.
After Consolidtion of 4 shares into 1, we get 75.8 m shares.
Issue of new Consol Shares to Max = 218.75 m shares.
Issue of new Consol Shares to PrimePartners & Mileage for professional service = 8.75 m.
Total = 303 million Consol Shares.
Assuming current px level, the implied market cap is $170 million.
The business of Max earned S$5.2 million net profit for FY2011, so the implied PE is 33X.
33X -- is too expensive to be buying Aussino shares at 14 cents currently.
Compare that to Max, which is getting the shares at 8 cents (pre-Consol).
The S$5.2 m profit cited for Max Strategic is unaudited. That's 1 thing to note. Second thing is, we instinctly know that the accounting system in Myanmar is way behind international standards, so it follows that the S$5.2 mn cited should be viewed very cautiously.
NextInsight
a hub for serious investors
