Cinema-Blend-whereiszemoola

On Star Business, a ghastly news was announced!

• Saturday April 13, 2013
  Mixed views on IOI’s plan to re-list property division
  
  PETALING JAYA: Analysts have mixed views on whether the possible re-listing of IOI Corp Bhd's property division would create value for it.
  
  Early this week, a wire report had stated that IOI Corp was planning an initial public offering (IPO) of its property arm in the fourth quarter of 2013, speculating the total value of the listing to be in the region of RM10bil.
  
  This would be a huge improvement in size, considering that it was only in 2009 that IOI Corp had bought back its then-listed property arm IOI Properties Bhd for a mere RM310mil in cash and shares, valuing the unit at about RM1.3bil.
  
  “The plan to re-list its property arm is not new. In our sum-of-parts, we value the property business at close to RM9bil.
  
  “We would be positive if the group lists its property arm, as it would allow it to unlock value and for investors to better appreciate its property division,” said a CIMB Research analyst.
  
  She explained that at the moment, the property division was “hidden” and that there wasn't much visibility in terms of its value, future plans and launches in the pipeline.
  
  “For now, no one knows what IOI Property is worth because it is hidden inside IOI Corp. With the listing, we would obtain more information. We would know a lot more about its launches and future developments.
  
  “If it were to be listed on its own, then IOI Property would eventually be able to find its own value,” said the CIMB analyst.
  
  An Alliance Research analyst pointed out that back in 2009, IOI Corp had taken IOI Properties private as the company was undervalued, trading at 8.4 times versus IOI Corp, which was trading at 15 times back then.
  
  She said that as at IOI Corp's financial year ended June 30, 2012, the total asset value of the property development and investment segments stood at RM7.7bil, contributing a pre-tax profit of RM538mil or 20% of IOI Corp's total pre-tax profit.
  
  “While details on the listing are not known, we have doubts whether the move would add value to IOI Corp, given the latter's rich valuations as compared to most property companies.
  
  “This raises the issue of whether IOI Corp's property division's IPO could be priced at more attractive valuations than IOI Corp,” said the analyst.
  
  She said that IOI Corp was currently trading at a forward price earnings of 20.7 times on 2013 earnings.
  
  Another property analyst added that as IOI Property was currently 100% owned by IOI Corp, there was room for value creation.
  
  “If it were to go for a separate listing, this would mean that the parent company sells down its stake and gets back some value from its assets.
  
  “Perhaps, it could use that money to expand its business or give it back to shareholders,” said the analyst.
  
  The analyst pointed out that a separate property listing would also reduce the risk for the plantations side.
  
  This was because at present, funds from IOI Corp were being used to buy and develop land for its property segment. 

Like I had said before, due to the fact that Bursa Malaysia is a listed BUSINESS entity, a relisting simply means a new IPO and new IPO means more business and I have no doubt that Bursa Malaysia would welcome this relisting with open arms.

I doubt that Bursa Malaysia would care about the minority shareholders who were mightly screwed when IOI Properties were delised back in 2009.

That ghastly and unreasonable privatisation is explained in detail in the posting:Why Is Retail Investing Lacking? (Part II)

In 'short'...

• Now consider this story (the story of IOI Privatisation)
  
  You read about the company venturing into another country, just when that country is announcing some interesting projects. You get optimistic about the company, right? Analysts are optimistic too.
  
  So you invest in it.
  
  Then came another opportunity.
  
  Company announce a share split plus rights issue.
  
  Rights issue can't be that bad, right? Especially when the company is now having hot new project in another country. Times are exciting and the company 'invites' you to invest more money into the company by subscribing to the rights issue.
  
  So you decided to invest more, more so since you noted that the company was also buying back their own shares.
  
  The company shares meanwhile started to announce weak set of earnings. Stocks started to decline.
  
  7 months after you had subscribed to the rights issue, the stock, due to continued weak earnings, fell to its historical lows. The owners of the company too agree that the stock was cheap. So cheap that  they decided to privatise it!
  
  Now get this.
  
  Your cost of shares after the rights issues was 6.25.
  
  The company privatisation offer was a very generous 2.60!!!!!!!
  
  OUCH!!!! 

Now do consider what was written on the Star Business today.

So previously, IOI saw IOI Properties was undervalued. Like a vulture, IOI capitalised on the cheap valuations by taking it private.

Did IOI care about its minority shareholders who had subsribed to the rights issue at 6.25 7 months earlier? My opinion is a simple NO since IOI privatisation offer was a generously ridiculous offer of 2.60!

And IOI even denied publicly the early privatisation rumours!!!!

Yeah, denied publicly but yet the company did the privatisation!!! 

So when the subsidiary was considered cheap, it took it private.

Now to UNLOCK value, IOI Corp wants to relist it again!

Fair game for the minority investors???

You tell me!

!!!!!!

Think about it.

Given such rampant delisting and relisting of companies, how is the stock exchange going to attract retail investors????

Yeah, don't cry if the market lacks retail investors!!!

Remember think about the GAME that it is being played.

When a stock is undervalued, careful... the stock could be delisted via a cheap privaisation offer.

And yeah, they will even dare to tell you it is unfair but hey, the offer is reasonable!!! (Duh!!!)

And now when they want to seak (unlock) value, they want to sell you the shares by relisting it once more!

You like such games?

On Star Biz: IOI mulls relisting of arm

• Monday February 13, 2012
  IOI mulls relisting of arm
  By RISEN JAYASEELEN and DANIEL KHOO
  
  PETALING JAYA: IOI Corp Bhd is mulling a relisting of its property arm that would see the group unlock values in that segment and enhance the attractiveness of the parent company to investors as a more plantation-focused company, according to reliable sources.
  
  “The group is in discussion with two investment banks on this to get feedback, especially on the right timing of the exercise,” said a source.
  
  Analysts said the relisting of its property division would increase the stature of IOI Corp as a pure plantation play which would likely have higher valuations.
  
  “It will reduce the conglomerate discount and transform IOI Corp into a pure plantation play, with a controlling stake in a valuable property company IOI Properties. Sole industry companies usually tend to fetch higher valuations,” an analyst with a local bank-backed research house said.
  
  IOI Corp may wish to also time the relisting of its property arm in line with a more bullish view on the property sector.
  
  In a sales note to its clients issued in January, Maybank IB said that potential downsides had already been priced into the property sector and that it did not discount the possibility of raising its call on the property sector from “neutral” to “overweight” in the medium to longer term as developers today were “backed by considerable unbilled sales, providing near-term earnings visibility.”
  
  IOI Corp had privatised its arm in 2009. Then known as IOI Properties Bhd, IOI Corp had on Februuary 2009 launched a takeover offer at RM2.60 per share.
  
  The takeover was successful and IOI Properties was subsequently delisted on April 28, 2009. It is today wholly-owned by IOI Corp. IOI Corp has been actively growing its property business since.
  
  In January it acquired six acres of land in Singapore for RM995.5mil to build high-end condominums and will have to settle the entire amount to the government of Singapore within 90 days from the date of the tender acceptance letter.
  
  Presently, it has seven projects which it is developing locally with estimated gross development values (GDVs) of almost RM20bil.
  
  Properties can testify to its track record in building property projects that have sold well. Excluding the latest land buy in Singapore, it is also presently developing high-end projects in the southern neighbouring island state with GDVs close to RM6bil.
  
  IOI Properties has completed property development projects in Puchong, Putrajaya, southern Johor and Singapore before.
  
  Meanwhile, banking sources also said that IOI Corp was in talks with banks to raise more funds.
  
  “It is in a good position to do so, considering its huge cash flows from its plantation side of the business,” said one banker.
  
  The funds raised should give IOI Corp sufficient funds to not only pay for the Singapore land acquisition but also ready funds in the event it chooses to buy more assets such as plantation land.
  
  Based on its results for the first quarter ended Sept 30, 2011, IOI Corp had total short and long-term borrowings of RM688.24mil and RM4.87bil respectively. Most of these debts are denominated in the US dollar, the Singapore dollar and the yen.
  
  IOI Corp had cash and cash equivalents of RM3.22bil as at Sept 30, 2011.

Seriously?

Seriously?

You seriously cannot be kidding!!!

For those who 'forgot', do read how IOI Corp treated their minority shareholders of IOI Properties when they took IOI Properties private at a shockingly low price and worst of all, the privatisation was made one year after IOI Properties had completed a rights issue!

( In my humble and flawed view, this was the WORST privatisation done in KLSE history! )

Do read past postings:

• Minority Shareholders Of IOI Properties Are Screwed!

• IOI Properties?

• IOI Properties Minority Shareholders: You Do NOT have to SELL!

• On IOI Properties Privatisation Again