Special Situation stocks

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05 Feb 2015 19:41 - 05 Feb 2015 20:02 #21682 by Kapitan
In another forum, people r talking about Hoe Leong Corporation. Me got curious because the company recently announced a heads of agreement to dispose of its interest in 2 Malaysian companies for S$62 million.

This is a big amount relative to the market cap of Hoe Leong of $24 million.

But there are 2 things I noted fr my reading:

1. The consideration for the disposal would be satisfied "in the form of cash and/or issuance of securities in ABT," according to Hoe Leong's announcement.

ABT is the buyer and it is a listco in Malaysia.

The assumption some people have is that the consideration is entirely in cash. It's not the case.

2. Even if it's in cash, the company has very high bank borrowings that needs to be addressed. It has S$60 m in short-term borrowings and 17 m in long-term debt, as at end-Sept 2014.

Thus, the chances of a special dividend are low, imho.

As you can see Hoe Leong is not so straight forward as I thought before reading up a bit about the proposed disposal of 2 companies.
Last edit: 05 Feb 2015 20:02 by Kapitan.
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10 Feb 2015 16:07 - 10 Feb 2015 16:08 #21707 by yeng
Replied by yeng on topic Special Situation stocks
A certain stock topped the list of hot favorites of my friends last year. Is Resources Prima really that great?

If so, why has its price collapsed from 25 cents in Dec 2014 to 11 cents a while ago. Hardly inspiring.

Resources Prima is a newly completed RTO of a coal mining business in Indonesia and it has disposed of its previous PRC logistics biz (fka SkyOne).

Ahead of the RTO, Resources Prima doubled in price from 12 cents in July2014 to 25 cents in Dec 2014. Then kaput to 11 cents in Jan2015.

Immediately post-RTO & disposal of logistics biz, the company's net loss widens from HK113,000 to HK1 m. :(

NTA goes down 5.4 to 2.96 HKcts. :(

gearing up from 0.47 to 5.95. :(
Last edit: 10 Feb 2015 16:08 by yeng.
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28 Oct 2015 18:10 #22617 by Mel
Replied by Mel on topic Special Situation stocks
Mencast has recovered to 24.5 cents after bottoming at 20

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06 Dec 2015 13:49 #22735 by Mel
Replied by Mel on topic Special Situation stocks
Mencast has lots of finance expense in servicing its high debt. In 9M2015, out of $20.8 m gross profit, $4 m went to finance expenses. Admin expenses ate up another $14.2 m. Mencast was saved by a net gain of $6.5 million, mainly a one-time gain from disposal of property.

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19 Dec 2015 14:27 #22755 by Kapitan
Replied by Kapitan on topic Special Situation stocks
"The Company is currently in the final stages of negotiations with the counterparty
pertaining to one such New Project and will make an announcement if such New Project is
so secured."

SUNPOWER -- 27.5 cents.

More projects to come?

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24 Mar 2017 05:40 #23691 by Kapitan
Replied by Kapitan on topic Special Situation stocks
sunpower, 1+ year after my post above, now trades at 80 cents!

Look out for IEV (5.9 cents currently).... Alliance Mineral (28 cents)....GSS Energy (17.7 cents). Businesses with potentially quantum leaps in business performance.

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