Ocean Sky - Very Substantial Acquisition Or Reverse Takeover

extract of announcement made :-

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Introduction

The Board of Directors (the “Board”) of Ocean Sky International Limited (the "Company" and together with its subsidiaries, the "Group") is pleased to announce that the Company has entered into a Memorandum of Understanding (the “MOU”) dated 2 April 2012 with ChiwayLand Group (Singapore) Pte. Ltd. ("ChiwayLand", and together with the Company, the "Parties") in relation to:

(a) the proposed acquisition by the Company of the entire issued and paid-up share capital of ChiwayLand (the "Proposed Acquisition"); and

(b) the proposed disposal of the Company’s existing business to certain of its directors and shareholders, namely Mr Ang Boon Cheow Edward, Mr Ang Boon Chong and Mr Ang Siew Tiong (collectively, the "Controlling Shareholders", and such proposed disposal, the "Proposed Disposal"), (the Proposed Acquisition and the Proposed Disposal collectively, the "Proposed Transactions").

The Proposed Acquisition, if undertaken and completed, is expected to result in a “Very Substantial Acquisition” or a “Reverse Take-over Transaction” as defined under Chapter 10 of the listing manual (the “Listing Manual”) of the Singapore Exchange Securities Trading Limited (“SGX-ST”) and is subject to the approval of shareholders of the Company (the “Shareholders”) at a general meeting. The Proposed Disposal is an interested person transaction and will be subject to Shareholders' approval pursuant to Chapter 9 of the Listing Manual. The Proposed Acquisition and the Proposed Disposal will be inter-conditional on each other.


Rationale for the proposed transactions

The Directors are of the view that the Proposed Acquisition presents an opportunity for the Company to acquire a new operating business with a track record and growth potential. In addition, the Proposed Acquisition would have the potential to significantly increase the market capitalisation of the Company and potentially widen the investor base for its Shares, thereby enabling the Company to attract more extensive analyst coverage, leading to an overall increase in investor interest and trading.

Although the Group was profitable in the last financial year, it continues to operate under challenging market conditions, due to the slowdown in the recovery of the global economy and consumer spending, and the volatility of cotton and yarn prices. Given the foregoing, the Board is of the view that the Proposed Transactions and the resultant change of business will enhance shareholder value for the Company.


Information on Chiwayland and its subsidiaries (The “Chiwayland Group”)

The ChiwayLand Group is one of the leading property developers involved in the development, project management and sale of residential and commercial properties in the Yangtze River Delta region of the People's Republic of China ("PRC"). The ChiwayLand Group has a track record of more than 10 years in property development and has to date, completed and managed seven property development projects with an aggregate gross floor area (“GFA”) of more than 900,000 square metres. In addition to its completed properties, the ChiwayLand Group has a strong pipeline of large and well-located properties under and held for development with an aggregate GFA of approximately 1,885,000 square metres.

full announcement :- MEMORANDUM OF UNDERSTANDING

Investment activities - week ending 10 Feb

The focus here is the Cash portfolio as l have just updated the investment activity under the SRS portfolio.
Investment activities this week under Cash portfolio as below :-

FSL
Bought 10 lots of FSL this week when the price fell to 0.190 with the intention to averaging down.  But seeing that its road to better dividends days is getting tougher now so, l have decided to moved out my invested funds. The decision to sell away FSL is indeed a hard choice.  This is because l do still have full faith with the Management of FSL.  However, in order to move forward from here, l must not be overly emotional of it.


STX PO

I have finally braved up and sell off Stax Pan Ocean which was purchased back in August 2008.  The stock has gone through Consolidation which turned my 1 lot share into 100 shares.  Weeks after that, the stock price has been going downhill but have been gaining some strength of late. This is because there have been many speculations that it will be bought over soon.  Anyway, time to move on to reinvest the proceeds in other dividend paying companies.

CitySpring

I have this week sold off entire 15 lots of CitySpring after collected its dividends in advance which was derived from the exit selling price worked out. Will consider future reinvestment in it if its price weakens.

Ocean Sky
Original number of shares on Ocean Sky was 22 lots.  Only succeeded sold 20 lots of it at year end 2011 and now selling away the remaining 2 lots this week.  In its last announced results, gross margin is higher due to better mix but almost unchanged for nine months period.  Let's see whether there is a repeat of its Qtr 3 success in its Qtr 4 results probably, end of February month.  It has healthy balance sheet but l am worry of its higher inventory level at the end of the nine months period.  Reason given for this is due to higher level of confirmed orders for the succeeding quarter and l reckon this refers to Qtr 4; let's see.  If it's price weakens, l would consider reinvest in it.

Casa Holdings
I have set the exit selling price on Casa at $0.139.  With its stock price ends at $0.131and having notice its ex-dividend date is 13 Feb and also as overall share market weakens, l have decided to pull out my invested funds of 16 lots in it.  The company has a healthy balance sheet so, l shall revisit it again closer to its next dividend payment date, in next year (2013).

Cache Logistics
I will be getting the dividend from Cache Logistics when the cheque is in the mail on 29 Feb for my 4 lots in it.  Sold off entire 4 lots at break even this week and there is slim chance of reinvestment in it as l reckon other companies can offer higher dividend payout rate.


Sabana Reit
I will be getting the dividend from Sabana Reit  when the cheque is in the mail on 29 Feb for my 2 lots in it.  Sold off entire 2 lots at break even this week and there is a possibility for me to reinvest in it when its price weakens as its payout rate is quite good.

Datapulse Technology
Sold away 7 lots on Datapulse this week.  Its financials are looking good for Qtr 1, which was announced on 13 Dec 2011.  But as its expected ex-dividend date is in November, so pulling out my invested funds for now.

SG Medical
Added 25 lots in SG Medical this week but upon reviewing its financials further, it seems that they are not so outstanding.  So, l have sold off entire 41 lots in it.    There is also a private funds (Kendall Court) investing considerably in SG Medical for its eyes surgery centres in China.  Though its financials are not so outstanding but considering an anticipated higher dividends, l would consider reinvestment in it if its price weakens before its yet to be announced but assumed ex-dividend date in mid April.     


previous postings :- Cash - Closing Status 3 Feb, Investment activities - week ending 3 Feb

Cash - Closing Status 30 Dec

Sold Ocean Sky 20 lots.  Queued to sell 22 lots but only 20 lots was sold so what will l do with the remaining 2 lots on Ocean Sky .....

I have bought into Ocean Sky (on 15 Dec) after its ex-dividend date so l would have to wait till its next dividend payment in May 2012.  Based on Ocean Sky 22 lots and from its 2011 dividend payout, l would have gotten a gross dividend of  $350.  Selling the whole of 22 lots at the price which l have gotten for 20 lots at $0.133 would have given me a $340 nett gain (after clearing fee, etc.).   On 20 lots, the investment cost was $2325 and with the gain of $306 this equals to annualised rate of 13.2%.  I am not into punting so l will not loose sleep over it if its price going higher in the coming days or weeks ahead.  l have received a so-called retrospective dividend payment so this is really a bonus. 

The whole of this week, only managed to sell into strength on Ocean Sky but not other counters on my to-sell list; which goes to show overall market mood is still quite pessimistic. 

The stocks counters of five largest funds allocation are still the same as last week's.  Figure in bracket was previous posting's number. Five big stocks in their biggest funds allocation order are :-LippoMalls 16% (15%), CitySpring 8% (7%), Tech Oil & Gas 10% (10%), Suntec Reit 6% (6%) and FSL 8% (8%) totaling to 48% (47%) of the overall Cash portfolio.

 previous : Cash - Closing Status 23 Dec

Cash - Closing Status 16 Dec (unrealised stocks status)

Added Tech Oil & Gas 4 lots, HTL Int 6 lots, Ocean Sky 22 lots, LippoMalls 9 lots.

Sold SingTel 0.500 lots.

I hope to sell these counters next, which failed the annual dividend target based on a 100% funds allocation test - Mapletree Ind, First Reit, Cache, SingPost, Starhill Global, STXPO, Suntec Reit.  Restructuring and reallocation of portfolio is necessary so as to maximize (dividend) returns due to limited funds.  Selling these counters now would means suffering losses so, l will wait for better prices.

Most difficult to sell is STXPO of 0.1 lots, which was purchased in June 2008 and from past records which l managed to retrieve it was subject to share consolidation in Dec 2008.  Selling STXPO now means a loss of $2.2k!  STXPO will be in my to-sell list for the longest time.

Five big stocks in their biggest funds allocation order are LippoMalls 12%, CitySpring 8%, Tech Oil & Gas 8%, Suntec Reit 7% and FSL 7% totaling to 41% of the overall Cash portfolio. Suntec Reit will soon be removed from this five big stocks and be replaced by LippoMalls, CitySpring and Tech Oil & Gas.



previous post :-

Cash - Closing Status 09 Dec