Elite KSB RTO?

July 1, 2013 at 2:12 pm 8 comments

Disclaimer:vested in the stock, so opinion will be biased.

Elite KSB latest happenings is that the CEO will buy back the china feed mill business so as to improve the attractiveness of Elite KSB as a RTO candidate. Besides that, a final year dividend of 5.5 cents and another 6.6 cents from capital reduction is coming up soon. This has excited traders who bid up the stock.

The money from the dividends will be used by the CEO to buy back the China business, thus the generiosity of the dividends. Whether the price of the stock can remain significantly high above cash value depends on the possibility of RTO. Common sense tells me that chances of RTO is quite high else why would the CEO go through the trouble of capital reduction, buy back of asset and issue a generous dividend when earnings for year was much lower? He could have taken the easy way out and just delist the company.

As the IPO fever has cooled recently, if a company is keen on listing, a RTO may be a better alternative as the company need not search for new shareholders and issue at a lower price.

Entry filed under: Watch your step. Tags: .

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8 Comments Add your own

  • 1. Anonymous  |  July 15, 2013 at 11:29 am

    hi do you have any idea when will the next 6.6c div be given out? or where can i read up more on this? thanks! vested too

    Reply
    • 2. leechongmeng  |  July 18, 2013 at 8:43 am

      i don’t have an idea when 6.6cents dividend will be given out as it depends on when EGM is held to approve capital reduction and sale of feed mill to CEO and also High Court approval. This should take some time, wait for circular to be despatched.

      Please refer to SGX company announcement website and search for Elite KSB
      Here’s a quick link.
      http://www.finanznachrichten.de/pdf/20130618_184900_550_80FE712C8D66657B48257B8E00386158.1.pdf

      Reply
      • 3. Anonymous  |  July 18, 2013 at 5:49 pm

        thanks for the reply =)
        i notice this counter failed to recover after the recent 5.5c div, any view on this? Thanks!

      • 4. leechongmeng  |  July 19, 2013 at 12:24 pm

        elite ksb is mostly a cash company now, in fact it is overvalued. if not for the possibility of RTO, its price would have dropped further. So, of course it failed to recover after the dividend because the dividend is not from its earning power but from its dwindling cash.

      • 5. Anonymous  |  July 19, 2013 at 4:56 pm

        thanks for the enlightenment
        so am i right to say they have until around mid or end oct (can’t remember the exact date) to secure a rto if not they may face the possibility of delisting?

      • 6. leechongmeng  |  July 23, 2013 at 9:42 pm

        that’s right.

  • 7. Anonymous  |  July 16, 2013 at 11:00 pm

    Hi, will like to know more abt the 6.6 cents dividends too. Pls enlighten us. Thanks!

    Reply
    • 8. leechongmeng  |  July 18, 2013 at 8:43 am

      i don’t have an idea when 6.6cents dividend will be given out as it depends on when EGM is held to approve capital reduction and sale of feed mill to CEO and also High Court approval. This should take some time, wait for circular to be despatched.

      Please refer to SGX company announcement website and search for Elite KSB
      Here’s a quick link.
      http://www.finanznachrichten.de/pdf/20130618_184900_550_80FE712C8D66657B48257B8E00386158.1.pdf

      Reply

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