Wednesday, August 12, 2015

Say Cheese, White Tigers!

Monday, August 10, 2015

of BreadTalk and a case of "A rose by any other name would smell as sweet" mayhap not applicable for soya milk?

The Motley Fool has recently posted an article, "BreadTalk Group Limited’s Latest Earnings: Continued Growth in Revenue and Profit". In general the tone of the article is somewhat positive if one chooses to ignore the facts that BreadTalk traded at around 30.3 times its trailing earnings and offered a trailing dividend yield of merely around 1.1% and that as of 30 June 2015, BreadTalk had $98.1 million in cash and equivalents and $228.8 million in debt.

What the article missed out was the most important element in any business. Trust. While it is intangible, the lost of trust can be catastrophic to one's business. And I'd like to think that the recent issue concerning the so-called BreadTalk's "freshly prepared" soya milk drink which was in fact repackaged from Yeo's brand soya bean milk. It was said in Asiaone, "Soya milk 'mistake' a serious matter" that BreadTalk sold its 350ml bottles for $1.80 each while Yeo's soya bean milk is sold at FairPrice for $1.50 for a one-litre carton.

Impressive, BreadTalk. What a way to earn incredibly easy profit!!

Also this case has also helped the publicity of BreadTalk. People get to read more about the company especially when there's another article released about how BreadTalk gets stern warning from Case. Bad publicity is good publicity, huh, BreadTalk?

BreadTalk might indeed be quick to say sorry for not-so-fresh soya milk, but the customers will unlikely be that easy to forgive and forget.

I'd really be interested to see in short term, how the BreadTalk shares shall perform tomorrow and in longer term, how the BreadTalk Quarter 3 result shall turn out especially as they no longer enjoy the easy revenue from their "freshly prepared" soya milk drink.

Meanwhile Paradice Investment Management LLC, that early in this year had become a substantial shareholder of BreadTalk owning 14,116,924 shares of the company (in other words, 5.01% of the BreadTalk), could not be reached for comment.

Thursday, August 06, 2015

of F&N victory over MEHL

F&N scored a win! I must admit I'm surprised at how fast the MEHL agree to the deal concerning the the sale of F&N's 55 per cent stake in Myanmar Brewery Limited at US$560 million as determined by an independent valuer who applied the 2013 exchange rate. I like how Bangkok Post in the article, "F&N to sell Myanmar Brewery stake at $560m" seems to conveniently omit that part of the news. Hur hur.

Financial Times in the article, "Singapore’s F&N agrees Myanmar brewery sale" also quoted to say:

Thursday’s announcement marks something of a victory for the Singaporean company as MEHL had sought to pay in kyat, which would put the price tag at about $400m at the current exchange rate.

The announcement of the agreement has helped the F&N shares to close 4 cents higher at S$2.30 (an increase of 1.77%) after hitting the intraday high of $2.34.

The F&N website has rightly featured those bright smiles even though the 'Latest News' on the website has the 3 rather negative keywords of "DISPUTE". Heh.

Fraser & Neave Ltd will sell its stake in Myanmar Brewery Ltd at more than double the price offered by local partner Myanmar Economic Holdings Ltd (MEHL), capping a two-year dispute over the country’s leading beermaker.

F&N will sell its 55% share in the brewer at US$560 million to MEHL, the partners announced separately. MEHL had sought to compel F&N to sell the stake for $246 million, while an independent valuer estimated July 22 that it was worth $560 million, Singapore-based F&N said last month.

F&N is exploring other ways to access Myanmar’s beer drinkers after the sale as “it’s a very good market”, F&N’s head of investor relations Jennifer Yu said via telephone on Thursday. The deal will be completed on or before Aug 20 when the amount is paid, said MEHL in an e-mailed statement.

Myanmar’s emergence from economic isolation in 2012 has drawn consumer companies from Heineken NV to Coca-Cola Co, keen to access its estimated 54 million consumers. Heineken and Carlsberg A/S have both opened breweries in the Asean country, where beer sales are forecast by Euromonitor to reach $675 million by 2018.

The food and drinks-maker controlled by billionaire Charoen Sirivadhanabhakdi said Wednesday it will make a separate announcement with further details on the transaction.

MEHL, a Myanmar army-linked organisation, had filed a claim in late 2013 for F&N to sell out of Myanmar Brewery. The two companies had set up the Yangon-based maker of Myanmar Double Strong and Andaman Gold beer in a joint venture in 1995.

An arbitral tribunal had ruled in October 2014 that MEHL’s offer didn’t represent a fair value of F&N’s stake. The tribunal ordered the two companies to complete the deal within 30 days after the independent valuer’s report on July 22, according to MEHL on Thursday.
From Bangkok Post, "F&N to sell Myanmar Brewery stake at $560m".

Fraser and Neave (F&N) said that Myanma Economic Holdings Ltd (MEHL) has confirmed that the sale of F&N's 55 per cent stake in Myanmar Brewery Limited shall be completed at US$560 million (S$774.7 million), and an originating summons will be withdrawn by MEHL.

This value is based on the exchange rate between the Myanmar kyat and the US dollar as of April 30, 2013.

MEHL, F&N's Myanmar partner in the brewery, had on July 29 filed an originating summons in the Singapore High Court, requesting that F&N complete the transfer of its stake in Myanmar Brewery to MEHL or its nominee by Aug 20 for 500 billion kyat or the equivalent value in US dollars as at the day before the sale's completion. MEHL's desired exchange rate would translate to approximately US$400 million.

But F&N countered that the sale should be undertaken at the stake's fair estimate value of US$560 million as determined by an independent valuer who applied the 2013 exchange rate.

The Singapore High Court had, on July 31, dismissed with costs an interim injunction on MEHL's application.
From Straits Times, "F&N's Myanmar partner accepts US$560 million price for Singapore company's 55% stake in brewery".

Wednesday, August 05, 2015

@Northpoint: Shop Theft is A Crime; but why must there be TWO cardboard standees nearby PLUS one REAL security guard?!


Saturday, August 01, 2015

F&N versus MEHL...and also versus "F & N Bail Bond"?

F&N versus MEHL...and also versus "F & N Bail Bond"? Heh. Just kidding. So far it's really about F&N versus MEHL. And I am so looking forward to reading how the case will be decided when both party meet in court. See, the jointly appointed independent valuer has determined the fair value of the disputed Myanmar Breweries, but value it in kyat, instead of in US$ or at least, it should be made clear the value of kyat referring to which year. Sigh. What a lousy valuer, one may point out. Heh.

A long-drawn battle over Myanmar Breweries (MBL) is coming to a head, with both stakeholders preparing to face off in court.

Myanma Economic Holdings (MEHL) asked the Singapore High Court on Wednesday to force the sale of a 55 per cent stake in the brewer held by Fraser and Neave (F&N) to be completed by Aug 20.

MEHL has also filed an application for an interim injunction requiring F&N, its joint venture partner in the firm, to sell its stake for 500 billion kyat (S$540 million).

F&N is refusing to budge from its earlier position that any sale of the stake should be completed at the estimated fair value of US$560 million (S$770 million).

It insisted that the sum was determined by the jointly appointed independent valuer.

"It is our position that by choosing to refuse to complete the sale at US$560 million, MEHL has... breached its obligations," F&N said yesterday in a filing to the Singapore Exchange (SGX).

The exchange rate to be used for the deal has been a sore point between the joint venture partners.

While F&N says the 2013 US dollar/Myanmar kyat exchange rate must be used, MEHL has demanded that the deal be completed based on the official exchange rate as stated by Bloomberg on the day before the sale is closed.

MEHL's desired exchange rate would yield about US$401 million, well under what F&N is demanding.

The two firms have been at loggerheads since 2013, when F&N was taken over by parties linked to Thai tycoon Charoen Sirivadhanabha.

MEHL, which holds a 45 per cent stake in MBL, said the takeover breached the joint venture agreement, which, in turn, entitled it to buy its partner's stake.

It initiated legal proceedings and won but that triggered the dispute over the exchange rate.

An arbitral tribunal was appointed to settle the dispute over the estimated fair value of the F&N stake, which was nominated at 500 billion kyat by an independent valuer last month.

"MEHL stands ready and willing to conclude the sale and purchase of F&N's stake in MBL at 500 billion kyat within the 30-day period ordered by the arbitral tribunal," MEHL director Nay Wynn had said.

But F&N said MEH's refusal to complete the deal at US$560 million is a breach of its legal obligations. "The company has notified MEHL that it ... shall remain a shareholder of MBL," F&N said in its SGX filing yesterday.

Myanmar Brewery, which makes Myanmar Beer, Myanmar Double Strong and Andaman Gold, is the country's runaway leader, with an 83 per cent share of the beer market by volume.

Losing the MBL stake would deprive F&N of a significant growth driver and its only alcohol product as it sold its stake in Tiger Beer maker Asia Pacific Breweries in 2012 to Heineken.
From Straits Times, "F&N, Myanmar firm bound for court again over brewery stake".

Myanmar Brewery is the country’s leading beer-maker, producing popular domestic brew Myanmar Beer as well as Tiger Beer under contract.

The K500 billion valuation – US$403 million using yesterday’s exchange rate of K1240 per dollar – is for the 55 percent stake of the brewery currently held by Fraser and Neave Limited, a Singapore-based company. It comes as part of a long-running dispute with the minority owner, military-linked Myanma Economic Holdings Limited (MEHL).

MEHL won a ruling from a Singapore arbitration tribunal in October 2014, claiming its right of first refusal on the shares of Myanmar Brewery had been ignored by the sale of control of Fraser and Neave to ThaiBev in 2012. It said the sale constituted a change in ownership and therefore violated joint venture terms giving each partner first right of refusal to purchase each others’ shares before they were offered to a third party.

While the 2014 arbitration ruling decided in MEHL’s favour, it also set aside a previous valuation for the brewery and ordered the sale take place at a value determined by an independent valuer.

The valuer has determined the 55pc stake in the brewery is worth K500 billion, though the two companies disagree on what this means in dollar terms, according to statements issued by both companies yesterday. Fraser and Neave has said it would rather use an exchange rate from two years ago – when the kyat was much stronger against the dollar – while MEHL declined to specify a date for an exchange rate, though said it disagreed with Fraser and Neave’s stance.

The kyat has depreciated about 39pc against the dollar since April 2013, meaning MEHL would stand to benefit if a more recent valutation was used as it would have to pay a lower price for the majority stake in the brewery. For instance, K500 billion was worth US$560 million on Fraser and Neave’s date of April 30, 2013, while yesterday it was worth $403 million.

Fraser and Neave’s position is that any sale of the Myanmar Brewery stake should take place in US dollars based on the 2013 exchange rate. “There have been indications of a difference of opinion with MEHL on the currency and applicable exchange rate to be used for completion of the sale of the Myanmar Brewery Limited stake” it said.

MEHL said in a statement it disagrees with Fraser and Neave’s position that the sale should take place in US dollars at the 2013 exchange rate. Company officials declined to discuss the situation further when contacted yesterday.

Still, director U Nay Wynn said in the statement that the conclusion of the valuation takes the company one step closer to a final closure of an “unexpectedly long drawn process to protect our rights under the joint venture agreement with Fraser and Neave”.

“MEHL stands ready and willing to conclude the sale and purchase of Fraser and Neave’s stake in Myanmar Brewery at K500 billion within the 30-day period ordered by the arbitral tribunal.”

Myanmar Brewery has also recently faced a tightening market, as Dutch brewer Heineken and Danish brewer Carlsberg have opened this year in conjunction with local partners. Officials from both foreign brewers have acknowledged, however, that Myanmar Brewery has a significant head start.

Carlsberg said it spent $75 million on its brewery, and Heineken said it spent $60 million.
From Myanmar Times, "Myanmar Brewery stake worth K500 billion".

Wednesday, July 29, 2015

Rhinocéros Cosmique at Orchard Road