Spindex Industries

[ksir]

To me the biggest risk in investing in spindex is the low ball offer from the majority shareholder.
Obviously there is nothing illegal.
But, if you & some other minority shareholders own a passive 30% stake in company with your active biz partner who owns 70% and yet from the experience your partner did offer you some low ball price to acquire your stakes. Luckily to you, the offer was failed.
However, history tends to repeat itself. He just has to keep trying to increase the stakes and voila, sooner or later you are out by another low ball.
No matter how appealing the numbers are, the structure and “incentive” of the Management (from track record) is not aligned with minority shareholders.
<used to be vested>

But takeover bids are made at a premium to the current price, usually a good one (ie 21% for spindex this Feb).

Because our valuation is based on intrinsic value and if at current price you think that it is underpriced, the offer price was damn underpricing the minority shareholders?

[dydx]

In the last GO, the Tans managed to raise their interest from 25.47% to 72.4% by acquiring 54.14m shares at a low-ball offer of $0.85/share - i.e. the Tans spent a total of $46.02m (before professional fees). Conceivably, a big portion of the amount spent was borrowed from DBS Bank, as based on the latest Statistics of Shareholdings the entire of the Tans' interest is held under the name of DBS Nominees. With 72.4%, it is now quite easy for the Tans to negotiate with potential suitors interested in the whole Spindex business for a reasonable fair market valuation.

[BlueKelah]

I noticed Spindex took a big drop today and ended below $1 @ 96c.(on small volume)

Perhaps the US economy is cooling(secondary to Chinese slowdown and tightening credit affecting car loans). Automotive is one of the first sectors to indicate cool down in economy.  Should this continue its difficult days for Spindex again.

From their recent half yearly report:
[For the six months ended 31 December 2017, the Group generated a positive cash inflow of $7.6
million from operations. In addition to dividend payment of $3.5 million and repayment of term
loans amounting to $3.2 million, cash was also channeled to purchase new machines to replace
and improve manufacturing efficiency. In view of these outflows, the Group recorded a decrease
in cash and cash equivalents to $28.2 million as at 31 December 2017.
On the balance sheet, the increase in trade receivables and higher inventory were due to
slowdown in collection and lower sales toward the end of second quarter. Although fixed deposits,
cash and cash equivalents were lower at $28.2 million, there was no debt. The Group’s balance
sheet remained very healthy as at 31 December 2017.]

[The general global economy continues to be uncertain and challenges remain. Continuous pricing
pressure and volatility in macroeconomic factors such as adverse foreign exchange rates will
affect business profitability. The Group is experiencing a slowdown in the automotive sector that it
serves. The Group maintains a cautious outlook for the rest of FY2018.]

Waiting for 30c again, next round coming.... 

[Elliot]

Does anyone notice that right now, on sgx.com, it shows 2,944 lots of Spindex transacted but no transacted price is shown?

Does anyone also notice that in the latest annual report, under top 20 shareholders, 2,944 lots are held by "UOB Kay Hian"?

What does this mean?

Are the Tans allowed to be buying now? It is less than 1 year since the GO.

[Quickbeam]

What is the hurdle to do another bid? 75%? They are now at 74.95% of the shares outstanding. The business may be cyclical, but insiders appear to enthusiastic. I hope it wont be a repeat of last years, poor results followed up by a low ball bid.

[opmi]

Dr Low and Wife owned about 7%+. Hard to privatise without getting their shares.
A bit like Select Foods delisting.

[weijian]

(1) There is a 6 month gap from close of one's last offer, before one can acquire new shares again (pg177)
(2) Between 30-50% ownership, one needs to maintain <1% increase in ownership within 6 months to prevent triggering a mandatory offer (pg73). There seems to be no requirement for mandatory offers when you cross 50%.

http://www.mas.gov.sg/~/media/resource/s...ex%202.pdf

[cyclone]

Acquisition of 25.1 Years Leasehold Land in Noi Bai Hanoi Vietnam

Spindex Industries Limited announced that the Company’s wholly-owned subsidiary, Spindex Industries (Hanoi) Co., Ltd has acquired a 25.1 years leasehold land in Noi Bai Hanoi Vietnam with an area of approximately 10,575 square meters at a cost of VND 27,910,800,000 (equivalent to approximately SGD 1,600,000) for its expansion and factory construction in the near future.

More details in https://links.sgx.com/FileOpen/SPINDEX_A...eID=547081

[cyclone]

Acquisition of a 50 Year Leasehold Land in Nantong Jiangsu

Spindex Industries Limited announced that the Company’s wholly-owned subsidiary, Spindex Precision Technologies (Nantong) Co. Ltd has acquired a 50 year leasehold land in Nantong Jiangsu China with an area of approximately 53,863.87 square meters at a cost of CNY20,683,726 (equivalent to approximately SGD4,200,000) for its office and factory building construction in the near future.

[dydx]

FY19 full-year results out last evening..
https://links.sgx.com/FileOpen/SpindexIn...eID=576069

Against the prevailing tough market conditions, Spindex management has again delivered a good set of numbers. A higher final dividend of $0.033/share is also declared.