China Minzhong Food Corporation

[cyclone]

On 31 August 2016, China Minzhong Food Corporation Limited (the "Company") requested for a halt in trading of its shares (the "Shares") on the Singapore Exchange Securities Trading Limited pending the release of an announcement.

The Company has been informed that there have been developments in relation to the proposed transaction contemplated under the Memorandum of Understanding dated 14 October 2015 disclosed in the Company's monthly updates to shareholders and the relevant parties are currently finalising such arrangements.

Further details are expected to be announced by the relevant parties, at the latest, by Tuesday, 6 September 2016. In the meantime, the trading halt in the Company's Shares will be extended until 5.00 p.m. on Tuesday, 6 September 2016.

The directors of the Company (including any director who may have delegated detailed supervision of this announcement) have taken all reasonable care to ensure that the facts stated and opinions expressed herein are fair and accurate and that no material facts have been omitted from this announcement, the omission of which would make any statement in this announcement misleading.

[specuvestor]

IIRC the sale of shares to Indofood looks like an annual repo of 7% that didnt settle. $40m looks like 2 years interest to me

Let's see if the "settlement" will go through this time as time is running out. Indofood just wants to collect his interest and go back to square one of 30% stake

[buddy]

Specuvestor : any comment on the offer. strangely why do you think they are doing convertible option as open offer.

[weijian]

Actually, this offer finally make sense now!

To recap, the previous offer was for CMZ BVI (mainly owned by Mgt) to buy out ~50+% from Indofood and trigger a mandatory G.O. Indofood would retain a ~30+% stake. Just like the "white knight" GO made by Indofood a couple of years back after the short seller attack, this offer was always going to end up in a situation where it would not satisfy the free-float requirement (>10% in the hands of the public with at least 500 shareholders). For the previous situation, Indofood's banker (UOB Kayhian) did a private placement at a discount of the previous G.O price to satisfy the listing requirements again to keep CMZ listed.

For the current offer, CMZ BVI will not be making the offer. Instead, Marvelous Glory (92% owned by Anthoni Salim, 7% owned by CMZ BVI) will make this offer. The convertible bond (to be converted into shares) basically mean that Indofood will continue to retain a 30+% stake in CMZ, since it is committed to take the partial cash+bond offer. All sane-thinking OPMIs should be taking the straight cash offer I reckon. If all the necessary conditions are satisfied, this will end up in a condition where Salim individually owns 50+%, Indofood owns 30+% and Mgt owning the remaining of a private company.

The practical difference between the previous offer signed last year and the current one, is that Anthoni Salim will be "taking over" CMZ Mgt's stake instead. This indicates that CMZ Mgt most probably did not manage to get the financial backing to take up the majority stake. It is interesting to note that the 40mil earnest sum paid by CMZ BVI will be "withhold" from them for a period of 18months with the issue of a "promissory note". Kudos to the Indons I suppose?

[HitandRun]

Actually, this offer finally make sense now!

......

The really interesting fact is that instead of just forfeiting the earnest sum of $40 million (which he is entitled to do so), Anthoni Salim is locking up this $40 million plus 32.6 million shares from management (value at $38.6 million) for at least 18 months in Marvellous Glory. What is Lin Guo Rong thinking and why is Anthoni Salim so NICE to Lin Guo Rong?

[getrich]

Ironic that at the end of the day, it is Anthoni Salim that is making the GO and not CMZ BVI.

[specuvestor]

^^my first cut is that Salim decided to wash the dirty linen behind close doors. I'm surprised that reputation is important to the Indonesians nonetheless this is an interesting twist of event which I wasn't expecting

I have to read up more first to comment more intelligently on the details.

Specuvestor : any comment on the offer. strangely why do you think they are doing convertible option as open offer.

[weijian]

Actually, this offer finally make sense now!

......

The really interesting fact is that instead of just forfeiting the earnest sum of $40 million (which he is entitled to do so), Anthoni Salim is locking up this $40 million plus 32.6 million shares from management (value at $38.6 million) for at least 18 months in Marvellous Glory. What is Lin Guo Rong thinking and why is Anthoni Salim so NICE to Lin Guo Rong?

Thanks, I missed out the 32.6mil shares that will be paid vs promissory notes as well. It's tempting to come up with the explanation/s for all these interesting developments but i guess as outsiders, we will never know. Maybe it would be good if there are insiders who can comment more.

[weijian]

^^my first cut is that Salim decided to wash the dirty linen behind close doors. I'm surprised that reputation is important to the Indonesians nonetheless this is an interesting twist of event which I wasn't expecting

I have to read up more first to comment more intelligently on the details.

Patriarch Liem might not care, but the new generation might consider it gold?

[buddy]

what are the risks of this deal not going through?