The Perils Of Trading MAA

Sigh ... you can be wrong or wronger. No, there was no assumption of the liabilities which might have added RM200m to the deal.

MAA Holdings will sell its entire stake in Malaysian Assurance Alliance Bhd (MAAB), Multioto Services Sdn Bhd for RM344m cash, valuing its assets at 1.36x book value, considerably lower than the recent transactions in the industry.

The bomb exploded when you read how the funds will be used, don't even think of getting a RM1.00 dividend:

The Company intends to utilise the cash proceeds from the Proposed Disposal in the following manner:
Purpose Notes Estimated timeframe for utilisation
- Repayment of medium term notes programme (“MTNs”). Immediately upon the date of
receipt of the proceeds from the Proposed Disposal (RM144m)
- Repayment of borrowings and payment of restructuring fees. Immediately upon the date of receipt of the proceeds from the Proposed Disposal (RM40m)
- General working capital requirements . Within 24 months from the date of receipt of the proceeds from the Proposed Disposal (RM164m)

TOTAL RM 344,000,000

So, to even get a 50 sen special dividend would be tough. Considering the company would technically be in PN17, any buyers or holders will have to wait and see what business will be injected to maintain its listing status.

When the cards are dealt this way, in poker, its best to fold and cry.

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