Courts Asia

[D123]

(A) The company wrote in the prospectus that they do not intend to enter further asset securitization programs once the latest one expires, which I assume would be in about 1 or 2 years' time. When that happens, does that mean they would need more working capital? Going back to the early 2000s, asset receivables turnover was about 230 days or so, compared to the 180 or so now in the last 4 years. Furthermore, given the supposed growing popularity of its credit lines, especially in Malaysia, wouldn't they need even more working capital then before?

where in the prospectus did they say so?

Thanks dzwm87 for making me read the IPO prospectus again. Seems like I made a few mistakes.

(1) I was wrong in assuming that the Asset Securitization Program 2012 ends in one or two years' time. On reading the prospectus again, it seems that the termination date for this program is Sep 2017 or 2018, at the option of HSBC. The previous Asset Securitization Program 2010 was for three years, so I assumed the replacement 2012 version would be for a short term as well. My bad.

(2) The part that drew my concern about the program not being renewed can be found on page 74 of the prospectus, near the end of the second paragraph. It says, "Upon the expiration of the Asset Securitization Program 2012, CSL will not sell further receivables to Assetrust." Assetrust is the vehicle which they use to transfer the receivables to HSBC. Having read that again, they only said they will not sell further receivables to Assetrust. They could very well create another vehicle under a new name to sell receivables to. That would be cheeky, but I guess, not totally surprising.