Memstar Technology

[CityFarmer]

Looks kind of complicated to me with their cross holdings if and when completed... From the earlier SGX Annc,

1. UEL is holding 13.18% of Memstar (Group)
2. Now, Memstar (Group) will hold 22.6% of UEL after the 1st Tranche Payment (in shares)
3. Memstar is proposing to either delist or stay listed, in which case, they'll pay out a distribution in Cash + UEL Shares (1-for-10). UEL will have their entitlement set off during the 2nd Tranche payment..

Yes, a complicated deal indeed.

It seems a fair deal IMO. The most important question to me is any room for "tikam" within the deal? Hmm...

(not vested)

At first look, Memstar NTA will be increased from RMB19.08 to RMB53.25 if and when this whole deal goes through. At an exchange rate of 1RMB = S$0.2072 (Yahoo Finance), this translates to S$0.11. Using current Memstar mkt price of $0.09, this translates to a potential 22.5% gain.

BUT (there's always a BUT), the new NTA is based on an UEL inflated share price ($1.10 vs current $0.955 ie. 15% premium). Let's look at the breakdown of this deal ie. what Memstar will get over 2 tranches,

1. Cash = $73.35Mil
2. UEL Shares = 200,055,550

Total Memstar shares in issue = 2,667,407,337

At UEL = $1.10, we get on a per share basis,
(Cash + UEL Shares) / Memstar Shares
= ($73.35M + 200,055,550 * $1.10) / 2,667,407,337
= $0.11 (similar to reappraised NTA)

But at current mkt UEL = $0.955, we get $0.0991 or ~10% premium over current Memstar mkt price of $0.09

So, looking at liquidation value, the key would be to watch both UEL & Memstar share prices.... perhaps clearer when key events like EGMs draws closer..

Yes, thanks for all the numbers.

The key numbers are $1.10 (issued price of UEL's shares) and $0.11 (valuation of MemstarT by UEL). Mr. Market's valuation seems slightly different.

IMO, for "tikam" purposes, MemstarT is the ONE deserving more attention. But for long term holding (if feasible), UEL seems a better candidate.

I agree with you, we should wait till more card unfolded (i.e. key events), or before them to max the gain ...

Omg, it seems I have more investment opportunities than I am able to serve with my time and $...

(not vested in MemstarT and UEL)