Some Comments On Astro

Past few weeks, many are aware of the many so-called articles making insinuations that Astro could be worth much more if it sold of its overseas operations. The justification is Astro's Malaysia's operations is doing great and making tons of money. Some suggested that it could even go private.

Here's one such past news article: Astro studying revamp proposals

• Astro All Asia Networks plc is considering various proposals to restructure the company in efforts to put in place an efficient capital and corporate structure. The exercise may include a separation of its overseas operations, as well as a possible one-time special dividend payoff.
  
  At a press conference after the company’s AGM yesterday, deputy chairman and group CEO Ralph Marshall said the board had not decided on any of the proposals that its bankers had put forth and that no timeframe had been set for any possible restructuring.
  
  Over the weekend, several media reports speculated Astro was considering a plan to divest its unprofitable international operations in a deal valued at about RM9bil......

The privatisation idea had been shot down repeatedly and so has the ludicrous one-time special dividend payoff.

And yes, the overseas operations NOT doing good for Astro.

However, if this would be true, then do consider the following clip from Dow Jones news wire last night.

• KUALA LUMPUR (Dow Jones)-- Astro All Asia Networks Plc (5076.KU) Monday said it has raised its stake in Indian radio station South Asia FM Ltd. to 20% from 6.98% for MYR60.5 million (INR790.5 million).
  
  The Malaysian satellite-TV operator said in a stock exchange filing that its wholly-owned unit, South Asia Multimedia Technologies Ltd., acquired the additional 13% stake in South Asia FM via a combination of new share issues and shares of existing shareholder A.H. Multisoft Private Ltd.
  
  South Asia FM is a 59%-owned unit of Sun TV Network Ltd. (532733.BY), the company said.

So how?

Me? I am confused.

This latest corporate exercise from Astro does not suggest that it wants to sell of its overseas operations at all. Instead it wants to pump in more moolah! Yeah, pump up the volume yo!

So how and why should one want to try to evaluate Astro without its overseas operations when it appears that they have no intention to do so?

Me? I surely do not know how to and neither do I understand the justification to do so.

Astro and its overseas operations remains as one.

And in regards to its overseas investments.

I wonder where and how Astro is making the justification to invest more and more money overseas when clearly there isn't the return to justify such investments. I wonder if the minority shareholders question such wisdom.

Yeah, I do understand that sometimes company , that do behave exactly like an investor. Well, why shouldn't they? They make an investment and they prefer to hold steadfast to their original investment ideas. Which is good practise but there's a fine line here because sometimes like share market investing, poor judgement exists!

Yes, people do screw up and make mistakes. And to hold on stubbornly to a bad idea could be disastrous!

And I do have an example.

How's the idea of building a tropical island resort in a colder country like Germany?

Does this sound like a sure win idea? Or does this sound like a wild, wild idea which could fail? And if so, shouldn't there be a point where the company should put their hands up and say 'sorry folks, that idea was poor!'?

Well, this is the story of Tanjong's Tropical Island Resort Investment which despite making losses all these years, the company held on stubbornly to this rather poor investment idea. End result? Millions and millions lost. ( See Tanjong also. )

So how?

Could Astro continue to spend millions (and not make justified returns) in its overseas investments?

Me? I think there's a fair chance that Astro will continue to do so.