AusGroup's listed shell to seek RTO opportunities

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AusGroup stock shot up 39% in September. Chart: FT.com

AUSGROUP, listed on the Singapore Exchange, has been a hot stock since it announced on Sept 24 plans for a listing on the Australian Securities Exchange.

This will be done after it demerges all of its subsidiaries into a group headed by its wholly owned unit, AGC Australia Pty Ltd.

It will distribute all the shares of AGC to shareholders of AusGroup.

It will also seek a new business to inject into AusGroup, effecting a reverse takeover for it to remain listed on the Singapore Exchange.

At that point, AGC Australia will seek a sole listing on the ASX.

An article in the current weekly edition of The Edge Singapore quoted AusGroup Laurie Barlow saying that the completion of the demerger, the distirbution of AGC shares and the RTO will all be "inter-conditonal upon the completion of each other step."

This is to avoid a situation where AusGroup, listed in Singapore, becomes a shell without any business.

The SGX will need to approve of the plan as will Australian regulators and AusGroup's own shareholders.

What if it is not allowed to proceed?

"It probably may get sold down a little bit if the deal falls apart but I don't think it will be whacked down," The Edge quoted Lee Yue Jer, an analyst with DMG & Partners, as saying.

For the full story, go buy a copy of The Edge at $3.80 from the newsstands.

Recent story: LIAN BENG, AUSGROUP: What analysts now say.....


 

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In recent months, Nam Cheong Limited, Malaysia's largest shipyard for offshore support vessels, has attracted the attention of more broking houses. Photo: Company



Excerpts from UOB Kay Hian report 4 October 2012.


UOB KH says NAM CHEONG is a "steady ship that will stay its course"

We hosted a non-deal roadshow for Nam Cheong on 2 October in Kuala Lumpur.

Vessel sales to increase 60-70% in 3-5 years. Nam Cheong has medium and long-term plans to increase its regional market share by securing more customers in the Middle East, West Africa and Asia.

We believe Nam Cheong’s shipbuilding programme could increase from 18 and 19 vessels to be delivered in 2012 and 2013 respectively to 30 vessel deliveries per year in 3-5 years’ time.

Maintain BUY and target price of S$0.30, implying a 46.3% price upside.

Our target price is pegged at 9.7x 2013F PE (2013F EPS: 7.7 sen or 3.1 S cents).

Our target PE is 1.3SD above peers’ long-term PE mean of 7.0x, which we deem to be justified given Nam Cheong’s dominant 50-75% market share in a high barrier-to-entry market.


Recent story: NAM CHEONG: Malaysia's no.1 OSV yard rides nation's transformation


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