Thursday, March 24, 2016

Select Group, HPL, Huan Hsin Holdings, China Kangda, Sembcorp, OKH Global

The following stocks may be in focus today:

F&B firm Select Group is being taken private by a consortium led by Temasek Holdings-linked Dymon Asia Private Equity, with the aim of giving investors more flexibility to manage the business. The consortium includes Select's co-founders and brothers Tan Chor Khoon and Tan Choh Peng.The offer price is 52.5 cents a share, a 23.5%  premium over the last transacted price on March 18.

Hotel Properties Limited (HPL), via its associated company, VN NH Holdings, has entered into a sale-and-purchase agreement to buy American Indochina Resorts Limited (AIRL) for US$65 million ($88.3 million). The US$65 million includes the assignment of shareholders' loans totalling about US$8.5 million. A commissioned valuation shows that the resort has a market value of US$66.5 million as at Nov 2, 2015. The acquisition will be funded by internal resources of HPL and its joint-venture partner.

The auditor of Huan Hsin Holdings, Deloitte & Touche, has warned that the Chinese electronics contract manufacturer might not be able to continue as a going concern. Deloitte says the firm's financial statements for the year ended Dec 31, 2015 show that its current liabilities exceed current assets by $55.46 million and point to a capital deficiency to the tune of $65 million.The preparation of the financial statements on a going-concern basis depends on the successful completion of a share subscription exercise to raise up to US$250 million ($340 million) in two tranches, says Deloitte.

Auditors BDO LLP have warned about food processing firm China Kangda Food Company's ability to continue as a going concern. BDO notes that the firm's liabilities exceed its assets by RMB282 million ($59 million) as at Dec 31, 2015.  In its financial statements released at the end of February, the company had bank borrowings of RMB649 million, which are due this year. The firm says its directors reckon it has enough working capital to finance its operations in 2016.  China Kangda incurred a net loss of RMB28 million last year.

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