LTC Corp (prev. Lion Teck Chiang)

[valueinvestor]

Since as an investment property the freehold Lion Industrial Estate property/land plot is a non-core asset and has no bearing to Lion Teck Chiang's other 2 on-going businesses of steel trading and residential property development, to unlock its value the property can be simply sold at or close to its current BV (based on professional valuation) of $79.8m. This is equivalent to a cool $0.51/share, based on Lion Teck Chiang's 156.453m outstanding issued shares. To reward shareholders, Lion Teck Chiang could decide to pay out a substantial portion of the proceeds by way of a special dividend or capital reduction. If and when this happens, Mr Market will cheer and bid up the share price towards its NAV/share of $1.009 (as at 30Sep10).

Of course, the above is an easy way-out! To maximize the value of the piece of prime freehold land, anyone would expect Lion Teck Chiang's management and BOD to get it re-zoned for commercial purpose in a major re-development. If successful, the piece of prime freehold land will be worth a lot more than $79.8m!

After selling the buildings, LCT will no longer have the rental income and the proceeds from the sales will have to pay back some loans, so it will be very much lesser than the 0.51/share.