Stocks to Watch
*M1: According to Bloomberg, Warburg Pincus has dropped out of the bidding race but MyRepublic is reportedly seeking private equity backing to pursue the mobile carrier after failing to win Singapore’s fourth mobile operator license. Other contenders that have submitted first round offers include Shanxi Meijin Energy and China Broadband Capital. Substantial shareholders Axiata Group, Keppel T&T and SPH, which together hold a combined 60% of M1, has appointed Morgan Stanley to review their stakes.
*OCBC: Received proposals from several parties for its 20.47% effective stake in UEL. Bloomberg reported that the group has picked Perennial for final buyout talks, edging out other suitors, including KKR and Singhaiyi. Based on UEL’s current market cap, OCBC stands to reap gains of $69m and $307m for its direct and indirect holding (via 87% owned Great Eastern), respectively. UE's property portfolio include Rochester Mall, UE BizHub City, as well as condominiums, hotels and serviced apartments. The counter trades at 0.89x P/B.
*HG Metal: Subject of an open letter by activist hedge fundQuarz Capital Management calling on the group to distribute up to $10m of its hefty cash pile of $29m (65% of market cap) back to investors and to explore the possible sale of its 22.6% stake in listed steel mesh manufacturer BRC Asia, worth $35m. This could boost its boost its shareholder value by >40% by 2018.
*Citic Envirotech: Awarded Rmb54m Phase 2 expansion project withdesign capacity of 25,000 m3/day for a wastewater treatment plant in Henan, China. This will lift total capacity to 50,000 m3/day. Construction is expected to be completed within one year in a year. The project comes with a 25-year service concession and minimum 15,000/20,000/25,000 m3/day offtake from year 1/2/3 onwards, guaranteed by the government.
*Silverlake: Insurance processing arm launched a suite of analytic solutions, TrueSight Analytics, for insurers and has won its first customer in Indonesia and is looking to extend the product to its regional customer base of 120 insurers.*Miyoshi: Proposed 45m placement of new shares (10% of share capital) at 6.8¢ apiece. Net proceeds of $3m are intended for new investments (35%) and working capital (65%).
*Magnus Energy: Terminating its joint investment agreement with Yangtze Investment Partners and will receive a repayment of US$1.2m of principal sum and 20% profit guarantee. It intends to use the funds for working capital requirements and its current projects.