Wednesday, October 14, 2009

The Cosway Story Continued..

Blogged previously: Singer Malaysia And Seven Eleven Proposed Listing

Oct 2006.

  • Cosway minority shareholders prefer sale
    By Chong Jin Hun

    MINORITY shareholders of Cosway Corp Bhd want the direct-selling firm to be put up for sale rather than let its parent Berjaya Corp Bhd (BCorp) take it private.

    "It is a bad idea to take Cosway private as it is a good and profit-making company with a bright future. Investors like to invest in companies with good dividends and bonus issues," proxy holder William Woon told reporters after Cosway's annual general meeting in Kuala Lumpur yesterday.

    He said it would be better to put the company up for sale as competitive bidding can produce higher sale prices.

    Woon was commenting on BCorp's recent announcement that it is considering a proposal to buy the remaining shares it does not own in Cosway. BCorp currently owns 74.4 per cent in Cosway....

They argued against the privatisation.

Worst still was the pricing of the offer.

Cosway had 344,434,000 shares. At an offer of 1.20, Cosway was effectively valued at 413 million.

On today's Star Business. Berjaya to inject Cosway into Hong Kong-listed unit

  • Wednesday October 14, 2009
    Berjaya to inject Cosway into Hong Kong-listed unit

    PETALING JAYA: Cosway Corp Bhd and Biofield Sdn Bhd have proposed to sell their combined 90% stake in Cosway (M) Sdn Bhd (Cosway M) to Berjaya Holdings (HK) Ltd (BHK)
    for RM900mil.

    Cosway, Biofield and BHK are indirect subsidiaries of Berjaya Corp Bhd (BCorp). Madison County LLC, which owns the remaining 10% of Cosway M, is also selling its stake in a separate deal.

    BCorp said the proposed disposal of Cosway M was part of an internal re-organisation within the group that would put the company under BHK, which was listed on the Hong Kong Stock Exchange.

    In a filing to Bursa Malaysia, BCorp said the acquisition would be paid via the issuance of 741.2 million new BHK shares and irredeemable convertible unsecured loan stocks (ICULS) worth about HK$1.7bil and cash of RM44.7mil.

    The RM900mil, representing a premium of about 367% over the consolidated net assets of Cosway M of some RM214mil, was derived based on, among others, the past profitable earnings record and future earnings potential, proven track record, large distribution network, strong presence and the established brand name of Cosway. Cosway Corp will use the proceeds of RM44.7mil as working capital.

    BCorp also said its subsidiary, Berjaya Group (Cayman) Ltd (BGCL), had formed a loan capitalisation agreement with BHK, of which 180 million new BHK shares would be issued to BGCL as full and final settlement of the HK$36mil loan taken in 2001.

    As of Oct 13, the total debt amounted to HK$36.4mil, of which HK$36mil would be settled via the proposal loan capitalisation and the remaining to be repaid by BHK upon receipt of written demand of repayment.

    Meanwhile, Berjaya Hills Bhd, Prime Credit Leasing Sdn Bhd, Inter-Pacific Securities Sdn Bhd and Berjaya Sompo Insurance Bhd, all indirect subsidiaries of BCorp, together with Tan Sri Vincent Tan Chee Yioun and Rayvin Tan Yeong Sheik have proposed to sell their collective 40% stake in eCosway for RM107.6mil, also to be satisfied via the issuance of new BHK shares and ICULS.

    “This is expected to increase the profile of Cosway M in line with its global outlook and expansion plans,” it said, adding that the sale of eCosway was also part of the streamlining and allowed BHK to have full control.

    The proposed loan capitalisation, meanwhile, will enable the BHK’s repayment without incurring any cash flow.

I wonder how would Mr.William Woon feel today.



solomon said...

The strange part which I found is why Goldman Sach is accumulating BCorp? More than 10% now.

If one had followed BSinger during the early days til now, I could only said the major shareholder had a tendency to privatise when it is low, repackage and sell at higher price. A dream like everyone. Only short memory or new investors sometimes willing enter the dungeon.....