Exposed !! a can of worm or... a gigantic drum of shit ?
- From: baldeagle <botakeagle@xxxxxxxxxxxx>
- Date: Mon, 28 Jul 2008 19:20:54 -0700 (PDT)
On Jul 28, 10:58 pm, "truth" <tr...@xxxxxxxxxxxx> wrote:
http://ftalphaville.ft.com/blog/2008/07/28/14760/singapores-australan...
It's unusual - but for some struggling investors somehow comforting - to see
that occasionally, the Singaporeans make bum investment decisions and end up
losing (a lot) of money.
Following earlier news that Australand Property Group, the Australian unit
of Singapore's CapitaLand, will seek as much as A$557m ($532m) from
shareholders after first-half profit dropped 79 per cent amid plunging
property values, it seems timely to examine the forays by various
Singaporean entities into ventures Down Under.
While business media in Australia focused on the shock profit warning by ANZ
bank, the bigger shock, according to Australian commentator Stephen Mayne,
was Australand's announcement of an emergency A$557m capital raising.
As Mayne noted in his daily blog The Mayne Report, Australand began the day
with a market cap of A$905m and claimed net tangible assets of A$1.66 per
share, despite the stock having tumbled from a December 2007 peak of A$2.60
to Friday's close of just 98c.
Lo and behold, says Mayne, "today we get a one for one rights issue priced
at just 60c, with Sing Inc only promising to step in for their share of
$302m whilst the remaining $255m could fail if the stock tanks when trading
resumes".
If Singapore Inc wasn't standing behind Australand, you have to wonder if
the company would have even survived because for shock value today's
announcement is very similar to the surprising $500m capital raising that
then-MFS chief executive Michael King unveiled on Friday, January 18, 2008,
before he resigned the following Monday.
Australand's chairman made the following statement at the April 17 AGM: "Our
balance sheet and the facilities we have in place are well supported by
quality assets and strong operating cash flows from the business."
The company's chief executive Bob Johnston also gave no hint of the coming
drama, reassuring shareholders that gearing was only 40.4 per cent, net
profit came in at A$269m in 2007 and distributions were a most impressive
17c a share.
The collapsing listed property trust sector has turned up some extraordinary
developments but, as Mayne notes, "if even the Singapore government's
vehicle is in trouble with total debts of A$1.5bn, things must be really
crook".
And, when you sit down to tabulate the - er, less lucrative - among
Singapore Inc's Aussie experiences of late - "terrible" is Mayne's word.
Singapore Power laid out A$8.14bn in cash for the Alinta east coast assets
last August and then failed to flip it into SP Ausnet. This has left
Singapore Power lumbered with A$17bn in debt and the same power assets are
today probably worth about A$6bn.
Singapore Inc's Temasek meanwhile ploughed A$400m into ABC Learning at $7.30
a share 12 months ago and has watched almost 90 per cent of that evaporate.
Similarly, the decision to take a one third interest in the Myer Melbourne
property play at a valuation of A$600m now looks ridiculous, as does the
$717.5m purchase of a half share in Westfield Parramatta in April 2007 on a
skinny yield of about 5 per cent.
On top of the recently not-so-profitable Singaporean investments in western
banks, the shine is beginning to look distinctly duller on Singapore's famed
investment acumen.
The GIC investments in Swiss and US banks are
just the tip of the iceberg....the Singapore ship
has ramped into a huge ice berg..is it badly damaged
and sinking.
Let's see how much Singapore investment in
Australis is in the shit holes.
..1 Capital Land (Aust) ..... $ 532 millions.
(Money top-up to save
Capital land ) $ 302 millions
..2 Alinta (Spore power)
investment $8,140 millions
..2.1 Total debt 9ncurred
by Singapore power $17,000 millions
..3 ABC learning $ 400 millions
..4 Myer (Mel) property $ 717 millions
Total: ( A$27 billions)
This exclude those not disclosed. An amount equal
to 27,000 millionaires...an amount that could be
used to solved the problem of the poor.
Many of the "investments" were made recently,
a year or so ago. when the property and financial
markets were already reported in serious troubles, in
deep shit.
Is there an investigation into this debacle..to
ascertain whether any of the investments were
made for personal gains...to ascertain whether
step could be taken to prevent further bad
investments. Such mismanagement of our
national fund, in gigantic proportion, cannot
be swept under the carpet..or just explain away
as mistakes by officials.
The govt is keeping a thunderous silent..
In this case, silent means the hands of
those who manage the fund are full of shit.
.
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